Brazil and Mexico in hot spot with 2nd wave of credit downgrade, see S&P Global – Money Times

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In Latin America, Mexico and Brazil are under pressure (Image: Robert Nyman / Unsplash)

Some of the world’s major economies may have their ‘ratings‘credit cuts or placed under downgrade warnings in the coming months in a second global wave of revisions related to the coronavirus, warned the main sovereign credit analyst at S&P Global.

The managing director of the S&P sovereign group, Roberto Sifon-Arevalo, told Reuters that the immense costs of maintaining health systems, Business and workers during the pandemic are fundamentally changing the finances of some countries for the worse.

The rating agency has already downgraded or cut the outlook for almost 60 countries this year, but few among those were wealthier nations with higher ratings.

However, with some of these countries accumulating 15 to 20 debt points as a percentage of Gross Domestic Product (START) – amounts that would normally take four or five years to accumulate – and tied to higher spending for the next 3 to 5 years, that situation could be about to change.

“Are you talking about ratings on European Union, or in highly developed countries, such as the Japan or the United Kingdom, or in this part of the world, United States, who were able to implement very massive fiscal and monetary packages to defend themselves, ”said Sifon-Arevalo.

A total of 31 countries – almost a quarter of all nations assessed by S&P – currently have “negative prospects” for their ratings, which are most often converted into downgrades.

On Latin America, Mexico e Brazil are under pressure as well as the Colombia, which is hanging at the bottom step of the degree of investment and with a warning that it can be reduced to the classification of ‘junk’.

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