 | NEW YORK (Standard & Poor's) Jan. 18, 2007--The encouraging macroeconomic
performance of recent years in many Latin American countries is expected to
continue in 2007, according to a new set of sovereign risk forecasts from
Standard & Poor's Ratings Services. Accordingly, large countries such as
Brazil, Chile, Colombia, and Peru now enjoy a positive outlook, indicating the
possibility of higher sovereign ratings in Latin America in 2007. An article
titled "Sovereign Risk Indicators: Latin America," which was published
yesterday, focuses specifically on Latin American sovereign creditworthiness.
The article discusses some of the quantitative trends affecting Standard
& Poor's analysis in 2007 for all 18 sovereigns rated in the Latin America
region. A wider selection of economic indicators can be consulted at the
recently published "Sovereign Risk Indicators" for 113 sovereigns rated by
Standard & Poor's, which is published semiannually in January and July.
Standard & Poor's credit analyst Joydeep Mukherji noted that in 2006 GDP
growth for Latin America as a whole was more than 5%. "No rated Latin
sovereign experienced negative growth in 2006 or in 2005," said Mr. Mukherji.
"The Dominican Republic, Venezuela, and Argentina recorded the fastest growth
rates, while Paraguay and Brazil had the lowest growth rates. With the
exception of the Dominican Republic, South American countries grew faster than
Central American countries," he added.
"The region's average creditworthiness has started climbing back to
where it was at the end of the last century only since 2004, helped by sharp
improvements in the terms of trade, more flexible exchange-rate regimes, debt
reduction (including by defaulting in the cases of Argentina and Uruguay), and
more prudent fiscal management in some countries," continued Mr. Mukherji.
The article notes that the sharpest improvement in the net external
position has been in Venezuela, which was a net creditor by this measure in
2006 compared with a net debtor position only a few years before.
"Interestingly, all other sovereigns in the region are in a net debtor
position, showing the region's traditional dependence on external capital," he
concluded.
The report is available to subscribers of RatingsDirect, the real-time
Web-based source for Standard & Poor's credit ratings, research, and risk
analysis, at www.ratingsdirect.com. If you are not a RatingsDirect subscriber,
you may purchase a copy of the report by calling (1) 212-438-9823 or sending
an e-mail to research_request@standardandpoors.com. Ratings information can
also be found on Standard & Poor's public Web site at
www.standardandpoors.com; under Credit Ratings in the left navigation bar,
select Find a Rating, then Credit Ratings Search. Members of the media may
request a copy of this report by contacting the media representative provided.
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