Fitch Ratings: LatAm Sovereign Credit Still Under Pressure from Coronavirus

 

• The impact of the coronavirus pandemic on Latin America's economic growth and public finances continues to put pressure on sovereign credit profiles, Fitch Ratings says in a new report.
• This is reflected in the high proportion of sovereign ratings on Negative Outlook in the region, even after a number of downgrades this year.
• The proportion of Latin American sovereigns on Negative Outlook has almost doubled since end-2019 to about 70% (excluding those rated 'CCC' or below, where Fitch does not assign Outlooks).
• The region has become the new hotspot for the pandemic, having initially recorded far fewer COVID-19 cases than affected countries in Europe and Asia.
• Despite some recovery in commodity prices (especially copper), Fitch has continued to revise down 2020 GDP forecasts for the region and its largest economies to reflect weak incoming data, the extension of lockdowns in some countries, difficulty in easing social distancing measures, and the risk of prolonged economic pain where attempts to contain the virus have been less effective.

(Source: Fitch)