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Rating Actions Tilt Positive in 2023 Latin American sovereign rating actions have been mixed in 2023, but on balance have had their best performance in many years. By end-September, ���������ֳ� had upgraded six of the 19 sovereigns in the portfolio – the highest share of any region – and two are on Positive Outlook. Upgrades comprised Aruba, Brazil, Costa Rica (two notches), Guatemala, Uruguay, and El Salvador (albeit following a swap that we deemed a default in the latter case). We revised the Outlooks for Nicaragua and Jamaica to Positive. Negative rating actions have included downgrades for Ecuador and Bolivia (the latter’s Outlook was also revised to Negative) and the revision of Panama’s Outlook to Negative, while Peru remains on Negative Outlook. Argentina’s ‘CC’ rating signals ���������ֳ�’s expectation of probable default. Firm Growth in Region’s Largest Economies, Mixed Picture Elsewhere ���������ֳ� projects regional growth of 2.1% in 2023, down from 3.8% in 2022, and reflecting an upward revision from 1.7% expected earlier in the year driven by strong performance in the region’s largest economies – Brazil and Mexico. Growth has been mixed elsewhere, with momentum in Central America fuelled by remittances, sluggishness in Andean countries amid policy tightening and political turbulence, and a drought-induced recession in Argentina. Inflation has peaked and begun to fall in most places, enabling central banks to end rate hikes and begin cuts. Proactive monetary policy has helped contain financial-market and exchange-rate pressures amid US Fed tightening, notwithstanding some jitters from political noise.