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Although Peru is the one facing the worst economic estimates in the region, with a contraction estimate of 11.3% for this year as recently reported by the IMF, it is the only one among the main Latin American countries that has been saved of the rebates applied by Fitch to sovereign notes in foreign currency or in the outlook.
In fact, with a rating of “BBB +” with a stable outlook, in the agency’s scheme, Peruvians are only one ranking below Chile, which still ranks as the best student in the neighborhood with its new “A-” grade. with which it still ranks in the “good quality” rating block.
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The first one that had to face a deterioration like the one experienced this Thursday by Chile was Colombia. On April 1, when the confinements due to the pandemic in the region were just beginning, it saw its rating reduced from “BBB +” to “BBB-” and that was not enough, its outlook remained “negative”.
With a social outbreak that preceded the health emergency, as happened in Chile, the country is close to losing its investment grade. This, because with a new reduction it would have a note that is characterized by being of a “speculative degree”, abandoning the “satisfactory” quality block that it shares with Peru and Mexico.
The latter country, although it currently has a “stable” outlook, is one of the other nations that suffered a downgrade from Fitch. Although Mexicans dodged the worst part of the quarantines, they failed to avoid the economic contraction, which this year would reach 9%, therefore they also face an imbalance in their public accounts that made them worthy of the reduction from “BBB +” to ” BBB- “.
Meanwhile, Brazil, the country most affected by the pandemic in terms of human lives, has not seen its rating reduced from “BB-“, but its outlook, which is now “negative”. Argentina finally lives its own history: after having entered a default, it was raised to be left with a “CCC” note after it reached an agreement with its creditors last August.
