The international bond and credit rating firm has announced their prediction that economic growth in the region of Latin America will likely average a mere 0.9 percent in 2016-18. To put that into perspective, it’s well below the recent average of 3 percent achieved during the five-year period of 2010-15. The dismal financial forecast comes directly after the International Monetary Fund released an updated report saying that Argentina’s economic recovery will be “weaker than expected.”

And the reason for this pessimistic projection? Moody’s says it’s mainly due to fiscal “weakness in Argentina and Brazil”, two of the region’s largest economies.

In the report published yesterday in New York, Moody’s Investors Service also predicted that debt levels would rise in Argentina (rated B3 stable, “speculative with a high credit risk”) and Brazil (Ba2 negative, with “speculative elements and a significant credit risk”), as fiscal consolidation remains challenging and insufficient to reverse negative trends that seem to be scaring off investment.

The report outlines that “eight of the 29 Moody’s-rated Latin American sovereigns ended 2016 with a negative outlook, while only three countries had a positive outlook.” These numbers differ significantly from 2015, just one year before, when only six sovereigns had a negative outlook on their ratings and another four had positive outlooks.

Moody’s explained that the credit drivers – factors affecting performance and stock prices – for sovereign creditors in Latin America and the Caribbean are negative, due to “the weak global economic environment and still-depressed commodity prices.” They added that “rising debt levels and the prospect of higher global interest rates” are also impacting credit prospects.

Samar Maziad, a Vice President and Senior Analyst at Moody’s, tried and failed to provide any comfort in her statement: “Given some improvement in commodity prices and the rating actions already taken, we expect negative credit trends to be contained in 2017, relative to last year. Nonetheless, we expect the creditworthiness of a number of sovereigns to deteriorate further.”

According to the report, of the 29 Latin American sovereigns that Moody’s rates, Brazil (Ba2 negative), Ecuador (B3 stable), Trinidad & Tobago (Baa3 negative) and Venezuela (Caa3 negative) will experience the weakest growth and struggle most with credit challenges in 2017 to 2018.

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In terms of economic strategy formation for governments within the region, the investors service expects that, going forwards, “large fiscal deficits and high debt ratios will continue to constrain policy options.” Moody’s cautioned that despite weaker growth in many countries, the authorities “will be limited in their ability to initiate, or accelerate, easier monetary policy in 2017 due to higher global interest rates and volatile capital flows.”

A lack of ability to act on the problem at hand will most likely curb growth and contribute to higher interest costs on domestic debt. This is far from good news for Argentina and its neighbors.