Argentina: Moody’s Investor Service, the international credit ratings agency, has released a report in which it warns that the new Stand-By Agreement (SBA) that the Argentine government signed with the International Monetary Fund (IMF) last month would negatively affect the finances of the country’s provincial governments. In its report, Moody’s notes that, under the SBA, the Argentine government is committed to reducing its primary fiscal deficit from 2.7% of GDP currently to 1.3% of GDP by 2019 and that as part of this it has agreed to reduce the transfer of discretionary federal funds to the provincial governments so as to lower federal government spending. According to the report, the provinces that would be worst affected by the move would be those that receive the highest amount of discretionary transfers such as Buenos Aires, Chubut, Misiones, and Chaco.
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