Moody's: Mexico, among Latin American economies most vulnerable to slowdown
The international ratings agency noted that growing trade tensions between the United States and China are having a growing impact on the global economy, leading to a decline in business investment and international trade flows.
In a report, it noted that while Latin America is relatively closed to trade compared to other regions, some more open economies such as Bolivia, Mexico and Paraguay are among the most vulnerable to a global trade slowdown.
"A decline in export demand will negatively affect external accounts and Bolivia will be significantly affected by its relatively large current account deficits and the significant loss of foreign currency reserves in recent years," said Moody's analyst Samar Maziad.
"Weaker growth would mostly affect Mexico, where growth prospects are already moderate and declining. In Paraguay, the credit impact is likely to be limited because of relatively resilient growth and limited external vulnerability," he added.
In Chile, China's share is related to copper, as 53 percent of copper exports were destined for the Asian country in 2018. Peru accounted for 15 percent of total exports of metals and mining from Latin America to China between 2000 and 2017, according to the rating agency.
While a significant portion of Brazil's (26 percent) and Uruguay's (20 percent) exports are also destined for China, Moody's said those two economies are among the most closed in Latin America, meaning that exports do not contribute significantly to economic growth or directly to public revenues.
By Mexicanist Source Notimex