NEW YORK (AP) — Moody's analysts expect to keep raising the sovereign debt ratings of Latin American and Caribbean countries in 2011.
The region's economies prospered in 2010 while developed nations lingered in recession or anemic recovery, the analysts wrote in a regional outlook report Thursday.
A total of 10 countries were upgraded in 2010, while three others were assigned positive outlooks. Moody's says the nations are likely to build on those gains because of strong domestic demand, rising commodity prices and the global economic recovery.
Within Latin America, South American countries are likely to grow more slowly, while their Central American and Caribbean neighbors expand and catch up, the report says. It says Latin American countries will be less vulnerable to market shocks because they are borrowing for longer periods and building up reserves of foreign currencies.
The main risk faced by the region comes from China, the report says. The region depends heavily on demand from the United States and China. Export demand could decline if the U.S. recovery is anemic or if China's growth slows.
In addition, some investors are skittish after the Eurozone debt crisis, which was sparked by sovereign debt ratings downgrades there.
Brazil is vulnerable to those factors, but is likely to remain growing faster than it has historically, the report says. It says Brazil's rating of "Baa3," with a positive outlook, will likely be reviewed in the second quarter of 2011.
The team of analysts was led by Moody's Vice President and Senior Analyst Patricio Esteruelas.
Source: http://www.bloomberg.com
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