This year the economy will close with a growth close to 4.4%, according to different projections, but by 2023, the slowdown will reduce growth to 0.5%according to the Organization for Economic Cooperation and Development (OECD).
“This weakening in economic growth will have, among other repercussions, an impact on the fiscal soundness of Argentine local governments” as analyzed by the Moody’s credit rating agency.
And expanded: “Macroeconomic imbalances will weigh on Argentina’s growth during 2023 amid a high fiscal deficitaccelerating inflation, a weakened currency, and political tensions ahead of the October 2023 presidential election.”
In the projections, the rating agency stated that regional and local governments will have to increase spending in the next 12 to 18 months due to the growing social demands in the midst of falling purchasing power, high levels of poverty and unemployment.
I know “It will test operating margins in most jurisdictions” as a result of a slowdown in economic activity and growth in spending. And in a scenario of liquidity risk, and limited access to foreign currency“Argentine regional and local governments may have to refinance their debts.”
Source: Ambito
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