Argentina's economic reforms face challenges: Moody'sBUENOS AIRES, Dec. 17 (PNA/Xinhua) -- The economic reforms undertaken by the Argentine government faced challenges in its first year, with some failing to have had the expected impact, Moody's said in a report published Thursday.
"Since coming to power a year ago, the Argentinean government has successfully implemented transformational reforms which should lead to an upturn in private investment and drive greater growth," said the report by the credit ratings agency.
Moody's highlighted the positive factors that the Argentine government reached a deal with the country's international creditors, restored Argentina's status on the capital markets, and is reforming the national statistics institute, which measures inflation and economic growth.
Furthermore, the government has improved fiscal transparency and increased the central bank's autonomy, contributing to better operative conditions for the private sector, read the report.
However, "progress in the consolidation of these reforms could slow down next year due to growing political pressures and external economic risks," Moody's cautioned.
On Thursday, Argentina announced a rise of 1.6 percent in inflation last month, while the government said it would seek to keep inflation between 12-17 percent in November.
For the banking sector, a sustained economic recovery would create new lending opportunities while Argentina's return to capital markets will offer banks more financing flexibility, said Moody's.
However, it warned that "profitability could be harmed and capital could be reduced if inflation drops and financing costs increase in real terms."
"Asset risks could rise moderately as subsidies are eliminated and consumers' repayment ability diminished," it concluded.
In early December, Argentine President Mauricio Macri defended himself against critics, saying that he was "not (the magician, David) Copperfield.
"We are ready to grow after five years of stagnation. This was a year of construction and that comes from transformation," he said. (PNA/Xinhua)
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