S&P Global Ratings then downgraded Argentina’s credit rating it was just three levels above the defaultas investors brace for a looming recession expected ahead of the election year.

The country’s long-term foreign currency sovereign debt rating It has been lowered by two steps, from “CCC+” to “CCC-“according to a statement released by the risk assessment agency.

S&P also assigned a negative outlook, quoting economic imbalances and political uncertainty around the 2023 election.

It is the nation’s second credit rating downgrade in less than a week.after Fitch Ratings cut the country’s long-term foreign currency debt rating to ‘C’ on Friday, one notch above default.

“Divisions across the political spectrum limit the ruler’s ability to implement timely changes in economic policy. World capital markets are closed for Argentina,” wrote S&P analysts led by Lisa Schineller. “The ongoing severe drought has exacerbated pressures on the already troubled foreign exchange market”.

S&P could further downgrade in the next six to twelve months, depending on the nation’s execution of an International Monetary Fund program, as well as the health of its banking system.

The agency confirmed the long-term rating in local currency of “CCC-“.

NS