Rating agency DBRS Incorporated has upgraded its ratings on Argentina´s long-term foreign and local currency securities to “B” from “B (low)”.
According to the international report, strong growth in neighboring Brazil -Argentina’s main trade partner- and highly favorable world agricultural commodity prices have led to a strong recovery in 2010-2011 GDP growth.
However, the Canadian agency warns about increasing downside risks in advanced economies which might cause a significant adverse external shock in the South American country.
The economist Pablo Mareso explains that adjustment policies supported by international credit organisms like the IMF, foster uncertainty in the global arena.
The report also questions the accuracy of official statistics and the credibility of macroeconomic policies as “doubts over inflation reporting persist” and inflationary expectations remain high at 25%.
DBRS´ report comes up at times when Argentine government’s officials have strongly criticized the “irresponsibility and lack of professionalism of rating agencies”. President Cristina Fernandez has recently stated that these agencies have played a major role in the international financial crisis.
Following president Fernandez statements, Economy ministry Amado Boudou indicated that economy has been subject to the financial system and said that such scenario must change in order to achieve real development standards.
Despite DBRS’s overall positive outlook, credit rating agencies have set themselves up for negative press in Argentina where calls for CRAs to be regulated in a new and more stable world financial order have fallen on fertile ground.
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