OREANDA-NEWS. In its Latin American Sovereign Overview, Fitch Ratings forecasts that regional GDP will contract by 1% in 2016 after an estimated contraction of 0.9% in 2015, with risks largely skewed to the downside. Latin America continues to suffer from lower commodity prices, moderating China growth and external financial volatility. In some cases, political conditions are dampening the investment and growth outlook.

Most sovereign ratings in the region have Stable Outlooks. Only Brazil, Costa Rica and Suriname have Negative Outlooks. Nevertheless, in the absence of an adequate policy response, rating pressures could build selectively given subdued economic prospects, rising government debt and deterioration in external metrics.

Since Fitch's October 2015 Latin America Sovereign Overview, the agency has downgraded Brazil and Suriname by one notch each (both countries remain on Negative Outlook), while upgraded Jamaica by one notch and assigned Positive Outlook to the Dominican Republic ratings. Fitch has recently upgraded Argentina's LC rating although its FC IDR remains in 'RD'. The agency also initiated the coverage of Nicaragua in December 2015.