The ratings on the Republic of Argentina remain 'SD', assigned in late 2001 when the government defaulted on over US$60 billion in debt. The administration of President Nestor Kirchner faces a difficult challenge in shifting economic policy from short-term stabilization toward longer-term sustainable growth while addressing the needs of a population that has suffered a sharp fall in living standards (GDP fell cumulatively by around 20% during 1998-2002). Progress will depend upon, among other things, maintaining working relations with the International Monetary Fund, remaining current on multilateral debt, devising a credible plan to rebuild the financial system, and beginning the difficult process of debt renegotiation. Once Argentina emerges from default, its ratings will continue to be constrained by A high
