Friday, December 3

Moody’s expects the main Latin American economies to return to pre-crisis levels in 2022

The main economies of Latin America and the Caribbean will experience more moderate growth rates during 2022 than in 2021 but that will allow to recover the activity levels prepandémicos, according to a new report from Moody’s Investors Service.

The credit rating firm indicates that After a strong recovery in 2021, the region will register “more moderate economic growth rates andn the main Latin American economies for next year, with GDP in most countries reaching levels similar to those observed before the pandemic in 2022 ″.

In this context, The agency has improved the sovereign credit outlook in Latin America in 2022 to ‘stable’, versus the ‘negative’ outlook this year.

For next year, Moody’s projects a reduction in fiscal deficits and a gradual stabilization of debt ratios while the fiscal measures implemented in several countries to counteract the effects of the pandemic are being withdrawn.

Despite a notable increase in debt in most countries in the region, The rating agency expects governments’ flexibility in terms of debt to remain at levels similar to those seen before the pandemic. The exceptions will correspond only to countries that face high short-term financial pressures, or strong fiscal imbalances.

Finally, Moody’s has warned of rising social and political tensions in the region following the pandemic, which could increase pressures on fiscal management. In this regard, countries that have extensive social safety nets and adopt more effective public policies will be better positioned to manage these conditions and effectively address the challenges they face.

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