The ratings on the Republic of Argentina (B+/Stable/B sovereign credit ratings) reflect the impressive improvement in the sovereign's external liquidity, combined with a falling debt burden. Net external debt may decline toward 95% of current account receipts (CAR) in 2006 from over 120% last year. Total public sector debt may fall below 60% of GDP during the course of 2007 from nearly 80% last year. Impressive current account and fiscal surpluses, combined with rapid and broad-based GDP growth in recent years, have strengthened Argentina's financial profile. The threat of economic disruption caused by the acrimonious process of debt rescheduling has also abated. Argentina's ratings are supported by: A declining external debt burden. Net external debt is projected to decline below
