Moody's Sees Negative Outlook For Latin American Companies On High Rates, Low Growth

• According to Moody’s, Non-financial industry companies in Latin America are facing a negative outlook for next year because of continued high interest rates, slow regional economic growth, and projected low prices for commodities because of a deceleration in China.
• The rating agency said that though credit conditions for Latin American companies will be better in 2024 than during this year, uneven growth and still-high debt costs will affect spending, investment, and employment.
• "Strict financial conditions will continue until the market uncertainty in regards to the path of U.S. rates dissipates, which will limit financing options, especially for the more than two-thirds of corporate issuers who have a speculative grade," Moody's said in a report.
• Furthermore, the El Nino climate phenomenon will last until at least mid-2024 and contribute to price instability for agricultural, metallurgical, and mining raw materials and operative disruptions in much of the region.
• Of note, it is expected that Mexico will benefit from nearshoring efforts and higher activity in the automotive, real estate, and communications sectors; however, the mining industry is at risk of government intervention, Moody's said.

 (Source: Reuters)