S&P raises Argentina’s credit rating

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BUENOS AIRES: Standard & Poor’s raised Argentina’s credit rating one notch Tuesday, from B- to B, saying Latin America’s third-largest economy was on the verge of exiting recession.

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The rating bump gives a boost to center-right President Mauricio Macri, who has launched sweeping —often unpopular—economic reforms aimed at reviving growth.

“Argentina is making progress in resolving several macroeconomic imbalances in the country while gradually rebuilding the country’s credibility,” the rating agency said in a statement.

It predicted Argentina would return to economic growth of three percent this year, with inflation—a tricky problem for Macri—falling by half, to 20 percent.

Many economic analysts see signs of “green shoots” in Argentina, after it posted growth of 0.5 percent in the last quarter of 2016.

S&P predicted “broad continuity” over the next two years, but also warned of “uncertainties about the pace of implementation of the government’s corrective economic plan given ongoing political challenges.”

Macri, who took office in December 2015, faces a key test in midterm elections this October.

Some analysts say the upcoming vote has forced him to back off his austerity reforms.

AFP

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