Latin American Sovereigns Face Persistent Rating Pressure

• Downward rating pressures will persist in 2020 for Latin American sovereigns, Fitch Ratings says, with seven of 19 on Negative Outlook compared with five (plus one on Rating Watch Negative) at end-2018.
• Despite our expectations for a mild economic recovery (from a low base) for the region as a whole, fiscal, political and governability risks will continue to challenge economic and rating outlooks.
• Latin America includes the highest number of Negative Sovereign Outlooks among the world's regions. It has been challenged by persistent lackluster growth over recent years and risks to the downside are likely to persist into 2020.
• External challenges remain significant. The slowdown in the global economy will restrain the modest recovery forecast next year while several Latin American economies will be exposed in the event of a further escalation of the US-China trade dispute. Notably, previously faster-growing economies, such as Chile and Peru, have also been slowing. Latin America is forecast to remain the weakest-growing emerging market region in 2020.

(Source: Fitch)