Brazil’s persistently low economic growth over recent years has only limited implications for the economies and credit quality of the other Latin American countries, according to a report by Moody’s Investors Service.
The credit ratings agency (CRA) suggests that possible ‘slowdown contagion’ from Brazil will be limited because only a few countries have strong economic ties to Brazil, and these linkages are mainly through trade.
According to the report, entitled
‘Below-Trend Growth in Brazil Presents Limited Credit Risks to Rest of Latin America’
, within the region, trade exposure is particularly high in four countries: Paraguay, Bolivia, Argentina, and Uruguay.
A higher degree of economic openness – how much of economic activity involves imports and exports – heightens a country’s exposure to trade shocks. Countries with exposure to Brazil and a relatively high degree of openness include Paraguay and Bolivia, followed by Uruguay and Argentina.
“From a credit standpoint, the significance of below-trend growth in Brazil for the countries that we identify as most vulnerable will depend on how weak, or robust, their growth prospects are to begin with,” said Moody’s analyst Jaime Reusche, author of the report.
For instance, since Argentina’s growth rate has fallen to about 2%-3% from an average of 8.4% in 2004-08, persistently weak Brazilian growth could materially undermine already weakened growth dynamics.
For Uruguay, which after growing 6% on average from 2004-11 is now moving toward an annual rate more in line with potential growth of around 4%, Brazil’s slowdown will only contribute to the moderating trend already underway.
In Bolivia and Paraguay, a track record of relatively high growth despite persistent economic weakness in Brazil is the basis for Moody’s view that Brazil-related trade shocks would not necessarily lead to an abrupt adjustment in their growth dynamics.
In today’s digitally connected world, infinite quantities of data are produced by consumers daily at a mind-boggling pace and volume. With under three months left to prepare, here are four areas for businesses to consider, to make sure they are ready for GDPR implementation.
Cash-flow based metrics now feature prominently alongside traditional revenue measures of business performance in the key figures or financial summary pages of any public company.
GTNews asks Pugsley about what advice she would give to treasurers dealing with mergers and acquisitions, what the key challenges for her year ahead will be and how she is selecting a treasury management system (TMS).
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.