
DBRS Morningstar: Latin American sovereign credit will be shaped by political outcomes in 2022
DBRS Morningstar release.
3 March 2022
While Latin America rebounded quickly from the pandemic last year, momentum is expected to quickly fade in 2022. Accommodative macroeconomic policies are turning restrictive, price pressures are rising, and activity is approaching the region's productive capacity. The headline story for Latin America in 2022 will be weak growth and high inflation. However, more fundamentally, two problems that pre-existed the COVID-19 pandemic are reemerging as key constraints on the region's credit outlook: weak potential growth and fragile public finances. Rising commodity prices due to events in Ukraine may be positive for some net commodity exporters, like Brazil and Colombia, but these gains may be offset by the negative growth effects on key trading partners and potentially by capital flow volatility.
This commentary examines the credit outlook in 2022 for five Latin American countries where DBRS Morningstar has sovereign credit ratings: Brazil (BB (low), Stable), Mexico (BBB, Stable), Argentina (CCC, Stable), Colombia (BBB (low), Stable), and Uruguay (BBB (low), Positive). In our view, these five Latin American economies should be able to weather rising global interest rates and geopolitical tensions in 2022, in part due to strong global demand and favorable terms of trade. However, the outlook for sovereign credit in Latin America over the next few years will be largely shaped by political outcomes this year and the extent to which governments will be willing and able to address structural challenges.
“The recovery in Latin America is running out of steam and structural constraints are re-emerging,” said Michael Heydt, Senior Vice President, Global Sovereign Ratings. “The weak outlook heightens the importance of political developments this year. With elections in Colombia and Brazil, and an IMF program being negotiated in Argentina, it will be important to monitor whether the political environment becomes more or less conducive to much-needed reforms.”
Subscribe to the most trusted business intelligence platform in Latin America. Let us show you our solutions for Suppliers, Contractors, Operators, Government, Legal, Financial and Insurance.
News in: Political Risk & Macro (Mexico)

Mexico's new NDCs deemed ‘critically insufficient’ amid State support for fossil fuels
Mexico has pledged to double its renewable generation capacity by 2030. But recently, climate issues have been superseded by other policy priorities.

Nearshoring and industrial development in Mexico require 'robust' mining sector
BNamericas speaks with local economist José Luis De la Cruz about the mining sector's importance for increased industrial development and nearshori...
Subscribe to Latin America’s most trusted business intelligence platform.
Other projects
Get key information on thousands of projects in Latin America, from current stage, to capex, related companies, key contacts and more.
- Project: Block REC-T-56
- Current stage:
- Updated:
11 hours ago
- Project: Block REC-T-73
- Current stage:
- Updated:
11 hours ago
- Project: El Quijote wind project
- Current stage:
- Updated:
1 day ago
- Project: Iquique - Alto Hospicio cable car
- Current stage:
- Updated:
17 hours ago
- Project: Serra do Seridó Complex
- Current stage:
- Updated:
17 hours ago
- Project: Platero photovoltaic park
- Current stage:
- Updated:
16 hours ago
- Project: Valparaiso cable car
- Current stage:
- Updated:
18 hours ago
- Project: Cable car of Puerto Montt
- Current stage:
- Updated:
1 day ago
- Project: Maintenance and improvement of the Villagarzón - San José del Fragua corridor
- Current stage:
- Updated:
17 hours ago
- Project: Aguas Marítimas
- Current stage:
- Updated:
2 days ago
Other companies
Get key information on thousands of companies in Latin America, from projects, to contacts, shareholders, related news and more.
- Company: Racional Engenharia Ltda.  (Racional Engenharia)
-
Racional Engenharia Ltda. is a Brazilian engineering and construction firm founded in São Paulo in 1971 held by the Racional Group and directly controlled by Racional Participaç...
- Company: General Water S.A.  (General Water)
-
General Water is a private Brazilian company aimed at the supply, treatment and reuse of water resources. General Water is specialized in the development, operation and maintena...
- Company: Consorcio PMTS Línea 3
- Company: Omdia
-
The English company Ovum Ltd., part of the Business Intelligence Division of Informa Group, is a consulting agency which helps its clients to evaluate opportunities, to measure ...
- Company: SACYR Construcción México S.A. de C.V.  (SACYR Construcción México)
-
Sacyr Construcción de México S.A. de C.V. offers construction, concession and industrial services.
- Company: Ritz Instrument Transformers Inc.  (RITZ USA)
-
RITZ is one of the world´s leading specialists for Instrument Transformers: Low and medium voltage insulated with epoxy resin, high voltage transformers insulated with oil/paper...
- Company: PNE AG  (Pure New Energy)
- Company: One Communications Ltd.  (One Communications)
-
The description included in this profile was taken directly from an official source and has not been modified or edited by the BNamericas’ researchers. However, it may have been...