| COSTA DO SAUIPE, Brazil, March 30
COSTA DO SAUIPE, Brazil, March 30 Uruguay and
Peru are the first Latin American countries in line for a
possible credit rating hike by Moody's Investors Service, at a
moment when sovereign upgrades are expected to become more
scarce in the region, a senior analyst with the ratings firm
Moody's currently has positive credit outlooks for four
Latin American countries: Uruguay, Peru, Colombia and Jamaica.
After assigning a positive or a negative outlook on a rating,
the firm aims to make a decision on whether to adjust it within
"Uruguay and Peru have had a positive outlook for a while,
so we have to resolve what we are going to do," senior Moody's
analyst Mauro Leos told Reuters on the sidelines of the IADB
meeting in a resort near the Brazilian city of Salvador.
He said that Baa3-rated Uruguay, despite struggling with
persistent high inflation and slowing economic growth, remains a
low-risk country for bondholders due to its very comfortable
gross financing needs.
"The government has very strong cash positions that allow it
to cover up to 18 months of debt payments. Not only that, they
also have contingency lines that give them another six months
worth of debt payments," Leos said.
As for Peru, currently rated at Baa2, Moody's is optimistic
about the country's market-friendly policies and sound fiscal
management that have ensured a decade of strong private
investment and robust economic growth.
He said the ability to sustain an elevated growth rate is a
key element in Moody's analysis of Latin America, especially at
a time when external conditions that provided strong tailwinds
to the region over the past decade become less supportive.
"We think we're coming to the end of that phase and, from
now on, the challenges are more focused on preserving the
progress that was made in terms of economic policies and pushing
ahead with structural reforms," Leos said.
HOW FAST CAN COLOMBIA GROW?
Moody's, which assigned a positive outlook to Colombia's
Baa3 rating last July, is optimistic about the Andean country's
reduced fiscal deficits and consistent macroeconomic policies.
Still, the agency is not totally convinced that a $25
billion infrastructure program unveiled by the government will
be enough to boost Colombia's growth rates to a sustained pace
of about 6 percent a year, as forecast by Finance Minister
Mauricio Cardenas in an interview with Reuters.
"It seems that they're getting their act together and
they're maybe ahead of the pack, more so than Brazil
definitely," said Leos, referring to the country's ability to
promote infrastructure investments. "Still, in terms of the
medium term view, we're not as optimistic as the minister is."
Leos acknowledged that sustaining growth rates of more than
5 percent a year would be a "game changer" for Colombia.
"If that is the case, that is something to be reckoned
with," he said, noting that such growth rates would put Colombia
into to the league of fast-growing Latin American economies such
as Panama and Peru.
(Additional reporting by Alonso Soto; Editing by Rosalind