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/raid1/www/Hosts/bankrupt/TCRLA_Public/221202.mbx T R O U B L E D C O M P A N Y R E P O R T E R L A T I N A M E R I C A Friday, December 2, 2022, Vol. 23, No. 235 Headlines A R G E N T I N A ARGENTINA: OECD Forecasts Slowdown for Economy in 2023 GAUCHO GROUP: Posts $4.7 Million Net Loss in Third Quarter B R A Z I L BRAZIL: Expectations of Coffee Crop in 2023 Fall PETROLEO BRASILEIRO: Devalues 23% Since the 2nd Round of Election D O M I N I C A N R E P U B L I C DOMINICAN REPUBLIC: Spaniards Will Invest US$1 Billion in Tourism J A M A I C A [*] JAMAICA: UK Seeking to Expand Trade With Country T R I N I D A D A N D T O B A G O TRINIDAD & TOBAGO: Stable Exchange Rate Containing Inflation - - - - - ================= A R G E N T I N A ================= ARGENTINA: OECD Forecasts Slowdown for Economy in 2023 ------------------------------------------------------ Buenos Aires Times reports that Argentina's economy will grow 4.4 percent this year but will suffer a sharp slowdown in 2023, the Organization for Economic Cooperation and Development (OECD) forecast. Analysts from the group said in a report that a drop in economic activity in the last two quarters of this year would have a knock-on effect for the following year, according to Buenos Aires Times. They also warned that Argentina's government will be forced to roll back on spending if it is to comply with the targets outlined in its US$44.5-billion debt repayment program with the International Monetary Fund, the report notes. Despite a likely downturn towards the end of this year, gross domestic product is still expected to rise 4.4 percent, in large part due to an expansion in the first half of the year, the OECD said, the report relays. For next year, experts forecast that GDP will rise by just 0.5 percent - way below the two percent predicted in the government's 2023 Budget bill and the current estimate from the IMF, the report discloses. In practice, if the forecast is correct, it would only be statistical growth based on what is known as the "drag effect," and in practice the day-to-day situation will not result in improvements for the population, the OECD report warned, the report notes. "The economy is projected to contract in the third and fourth quarters of 2022, but annual GDP growth in 2022 will nevertheless reach 4.4 percent, before slowing to 0.5 percent in 2023 and then recovering to 1.8 percent in 2024," it said, the report relays. The organisation noted that "in a context of high inflation, tighter import restrictions, low international reserves and severely constrained fiscal space, risks remain elevated and investment and private consumption will remain subdued in 2023," the report discloses. Experts cautioned that "the IMF agreement has significantly reduced near-term macroeconomic policy uncertainty, but the external situation remains fragile," the report says. It concludes: "High inflation will weigh on private consumption and will take time to recede. Tight capital controls and policy uncertainty are causing investment to fall sharply in the second half of 2022 and their persistence will allow only a modest recovery in 2023 and 2024," the report adds. Meeting existing IMF targets outlined in the restructuring program will "require further spending restraint," the report's authors wrote, the report relays. In Brazil, GDP growth is projected at 2.8 percent this year. The OECD also forecast positive growth this year for Chile (1.9 percent), Mexico (2.5 percent) and Colombia (8.1 percent), the report notes. Global Context World economic growth is slowing due to decades-high inflation, the OECD said in the global section of its report, calling for "essential" further monetary policy tightening and "more targeted" government support, the report says. Global GDP is set to grow 3.1 percent this year - nearly half the rate for last year, according to the body. The slide is due to continue next year, with global growth falling to 2.2 percent before rebounding "to a relatively modest 2.7 percent in 2024", the Paris-based organization said, the report notes. Amid the effects of Russia's war in Ukraine, "growth has lost momentum, high inflation is proving persistent, confidence has weakened, and uncertainty is high," it said in its latest forecasts, the report discloses. "An end to the war and a just peace for Ukraine would be the most impactful way to improve the global economic outlook," OECD secretary general Mathias Cormann said during a press conference, the report relays. OECD chief economist Alvaro Santos Pereira said in the report that the global economy was "reeling from the largest energy crisis since the 1970s," the report notes. The energy shock has pushed inflation up "to levels not seen for many decades" and is hitting economic growth around the world, he added. The report notes that inflation had already been on the rise before the conflict due to bottlenecks in the global supply chain after countries emerged from Covid lockdowns. But the OECD said that inflation was set to reach eight percent in the fourth quarter of this year in the Group of 20 top economies, falling to 5.5 percent in 2023 and 2024, the report relays. Cormann said that inflationary pressure was decreasing, but urged central banks to press on with interest rates hikes, the report says. "We do expect inflation to gradually moderate as tighter monetary policy takes effect, demand and energy price pressures diminish over time and transport costs and delivery times continue to normalise," he told reporters, the report notes. However, he stressed there remained the possibility that "economic activity may become even weaker if energy prices rise further or if energy disruptions affect gas and electricity markets in Europe and Asia," the report relays. Fighting inflation is a "top policy priority", the OECD said, as soaring prices erode people's purchasing power worldwide, the report dicloses. "Our central scenario is not a global recession but a significant growth slowdown for the world economy in 2023, as well as still high, albeit declining, inflation in many countries," Santos Pereira said, the report adds. About Argentina Argentina is a country located mostly in the southern half of South America. Its capital is Buenos Aires. Alberto Angel Fernandez is the current president of Argentina after winning the October 2019 general election. He succeeded Mauricio Macri in the position. Argentina has the third largest economy in Latin America. The country's economy is an upper middle-income economy for fiscal year 2019, according to the World Bank. Historically, however, its economic performance has been very uneven, with high economic growth alternating with severe recessions, income maldistribution and in the recent decades, increasing poverty. Last March 25, 2022, Argentina finalized agreement with the IMF for a new USD44 billion Extended Funding Facility (EFF) intended to fund USD40 billion in looming repayments of the defunct Stand-By Arrangement (SBA), with an extra USD4 billion in up-front net financing. This has averted the risk of a default to the IMF and is facilitating a parallel rescheduling of Paris Club debt. As reported in the Troubled Company Reporter-Latin America on Nov. 18, 2022, S&P Global Ratings affirmed its 'CCC+/C' foreign currency sovereign credit ratings on Argentina. S&P lowered the long-term local currency sovereign credit rating to 'CCC-' from 'CCC+' and the national scale rating to 'raCCC+' from 'raBBB-'. S&P also affirmed its 'C' short-term local currency rating. The outlook on the long-term ratings is negative. S&P's 'CCC+' transfer and convertibility assessment is unchanged. Last April 14, 2022, Fitch Ratings affirmed Argentina's Long-Term Foreign and Local Currency Issuer Default Ratings (IDR) at 'CCC'. Fitch said Argentina's 'CCC' ratings reflect weak external liquidity and pronounced macroeconomic imbalances that undermine debt repayment capacity, and uncertainty regarding how much progress can be made on these issues under a new IMF program. On July 19, 2022, Fitch Ratings placed Argentina's Long-Term Foreign Currency Issuer Default Rating (IDR) and Long-Term Local Currency IDR Under Criteria Observation (UCO) following the conversion of the agency's Exposure Draft: Sovereign Rating Criteria to final criteria. The UCO assignment indicates that ratings may change as a direct result of the final criteria. It does not indicate a change in the underlying credit profile, nor does it affect existing Rating Outlooks. Moody's credit rating for Argentina was last set at Ca on Sept. 28, 2020. DBRS has also confirmed Argentina's Long-Term Foreign Currency Issuer Rating at CCC and Long-Term Local Currency Issuer Rating at CCC (high) on July 21, 2022. GAUCHO GROUP: Posts $4.7 Million Net Loss in Third Quarter ---------------------------------------------------------- Gaucho Group Holdings, Inc. reported a net loss of $4.73 million on $440,939 of sales for the three months ended Sept. 30, 2022, compared to a net income of $931,207 on $2.60 million of sales for the three months ended Sept. 30, 2021. For the nine months ended Sept. 30, 2022, the Company reported a net loss of $12.29 million on $1.27 million of sales compared to a net loss of $1.53 million on $3.22 million of sales for the nine months ended Sept. 30, 2021. As of Sept. 30, 2022, the Company had $25.39 million in total assets, $6.86 million in total liabilities, and $18.53 million in total stockholders' equity. Gaucho Group stated, "we have generated significant losses which have resulted in a total accumulated deficit of approximately $107.9 million at September 30, 2022, raising substantial doubt that we will be able to continue operations as a going concern. "Our ability to execute our business plan is dependent upon our generating cash flow and obtaining additional debt or equity capital sufficient to fund operations. If we can obtain additional debt or equity capital (of which there can be no assurance), we hope to acquire additional management as well as increase the marketing of our products and continue the development of our real estate holdings. "On November 8, 2022, we entered into a new equity line of credit agreement (the "Purchase Agreement") with an Underwriter, pursuant to which we will have the ability (but not the obligation) to sell, from time to time, up to an aggregate of up to $44,308,369 of newly issued shares to the Underwriter, at a price equal to 95% of the lowest daily volume weighted average price per share during the three consecutive days immediately following the date we direct the Underwriter to purchase such shares. The commencement of the equity line of credit is contingent upon the satisfaction of certain conditions in the Purchase Agreement. As of the date of this filing, these conditions have not been satisfied, and we are not yet able to sell securities pursuant to the Purchase Agreement. "Our business strategy may not be successful in addressing our liquidity issues and there can be no assurance that we will be able to obtain any additional capital. If we cannot execute our business plan on a timely basis (including acquiring additional capital), our stockholders may lose their entire investment in us, because we may have to delay vendor payments and/or initiate cost reductions and possibly sell certain company assets, which would have a material adverse effect on our business, financial condition and results of operations, and we could ultimately be forced to discontinue our operations, liquidate and/or seek reorganization under the U.S. bankruptcy code. The conditions outlined above indicate that there is substantial doubt about our ability to continue as a going concern within one year after the financial statement issuance date." A full-text copy of the Form 10-Q is available for free at: https://www.sec.gov/ix?doc=/Archives/edgar/data/1559998/000149315222032872/form10-q.htm About Gaucho Group Headquartered in New York, NY, Gaucho Group Holdings, Inc. -- http://www.algodongroup.com --was incorporated on April 5, 1999. Effective Oct. 1, 2018, the Company changed its name from Algodon Wines & Luxury Development, Inc. to Algodon Group, Inc., and effective March 11, 2019, the Company changed its name from Algodon Group, Inc. to Gaucho Group Holdings, Inc. Through its wholly-owned subsidiaries, GGH invests in, develops and operates real estate projects in Argentina. GGH operates a hotel, golf and tennis resort, vineyard and producing winery in addition to developing residential lots located near the resort. In 2016, GGH formed a new subsidiary and in 2018, established an e-commerce platform for the manufacture and sale of high-end fashion and accessories. The activities in Argentina are conducted through its operating entities: InvestProperty Group, LLC, Algodon Global Properties, LLC, The Algodon - Recoleta S.R.L, Algodon Properties II S.R.L., and Algodon Wine Estates S.R.L. Algodon distributes its wines in Europe through its United Kingdom entity, Algodon Europe, LTD. Gaucho Group reported a net loss of $2.39 million for the year ended Dec. 31, 2021, a net loss of $5.78 million for the year ended Dec. 31, 2020, and a net loss of $6.96 million for the year ended Dec. 31, 2019. As of June 30, 2022, the Company had $25.01 million in total assets, $10.25 million in total liabilities and $14.75 million in total stockholders' equity. =========== B R A Z I L =========== BRAZIL: Expectations of Coffee Crop in 2023 Fall ------------------------------------------------ The Rio Times Online reports that Brazilian coffee growers and experts have lowered expectations for next year's coffee crop in the world's biggest producer, following predominantly negative post-bloom developments in many of the areas they oversee. According to them, the initial expectations of an increase in production next year now seem distant, with converging perspectives for a crop similar in size to that harvested this year, the report notes. Higher production in Brazil next season was being considered by most international traders. It was one of the factors behind a recent drop in arabica coffee benchmark prices, according to The Rio Times Online. About Brazil Brazil is the fifth largest country in the world and third largest in the Americas. Luiz Inacio Lula da Silva won the 2022 Brazilian general election. He will be sworn in on January 1, 2023, as the 39th president of Brazil, succeeding Jair Bolsonaro. In July 2022, Fitch Ratings affirmed Brazil's Long-Term Foreign Currency Issuer Default Rating at 'BB-' and revised the Rating Outlook to Stable from Negative. In June 2022, S&P Global Ratings also affirmed its 'BB-/B' long- and short-term foreign and local currency sovereign credit ratings on Brazil. Moody's, in April 2022, affirmed Brazil's long-term Ba2 issuer ratings and senior unsecured bond ratings, (P)Ba2 senior unsecured shelf ratings, and maintained the stable outlook. On the other had, DBRS, in August 2022, confirmed Brazil's Long-Term Foreign and Local Currency Issuer Ratings at BB (low). PETROLEO BRASILEIRO: Devalues 23% Since the 2nd Round of Election ----------------------------------------------------------------------- The Rio Times Online reports that Petroleo Brasileiro S.A. (Petrobras) lost BRL103.6 billion in market value since the 2022 elections, from BRL448.7 billion to BRL345.1 billion. Preferred shares fell 25.5% in the period up to the close of Nov 24, 2022, according to The Rio Times Online. Common shares fell 21.4%, the report relays. Common shares recovered by 3.9% compared to the close of Nov. 23, the report relays. Preferred shares increased by 0.1%, the report notes. The most recent reduction, of 12.9% (preferred shares) and 10.6% (common shares), took place on Nov. 22 after the UBS bank downgraded Petrobras' recommendation and reduced the share target price, the report adds. Headquartered in Rio de Janeiro, Brazil, Petroleo Brasileiro S.A. Petrobras explores for and produces oil and natural gas. As reported in the Troubled Company Reporter-Latin America on July 22, 2022, Fitch Ratings has affirmed Petrobras' BB- Long-Term Issuer Default Rating. In addition, Fitch has revised the Rating Outlook to Stable from Negative following a similar revision to Brazil's Sovereign Rating Outlook. Egan-Jones Ratings Company on July 8, 2022, upgraded the foreign currency and local currency senior unsecured ratings on debt issued by Petrobras to BB+ from BB. =================================== D O M I N I C A N R E P U B L I C =================================== DOMINICAN REPUBLIC: Spaniards Will Invest US$1 Billion in Tourism ----------------------------------------------------------------- Dominican Today reports that President Luis Abinader was honored by Inverotel, a group of Spanish hotel chains in the Dominican Republic, and used the occasion to announce a one-billion-dollar investment over the next two years. During a protocol ceremony, the president accepted the plaque alongside the Minister of Tourism, David Collado, and thanked them for the honor, emphasizing that during his administration, he has only done what he believes is in the best interests of the country, and as a result, tourism development has increased, according to Dominican Today. He stated that while all governments have developed this sector, his management has "embraced it so much" that they have achieved results never seen before, the report notes. Encarna Pinero, president of Inverotel and general manager of Grupo Pinero, stated that the Dominican Republic has reason to celebrate the tourism sector's results in terms of visitor arrivals, which could exceed 7.2 million per year by the end of 2022, the report discloses. "These results show that when the authorities and businesses join efforts and we work together, each from their responsibility, we can achieve what we propose," he emphasized, noting that President Luis Abinader and Minister David Collado are two of the country's most fruitful figures, the report adds. About Dominican Republic The Dominican Republic is a Caribbean nation that shares the island of Hispaniola with Haiti to the west. Capital city Santo Domingo has Spanish landmarks like the Gothic Catedral Primada de America dating back 5 centuries in its Zona Colonial district. Luis Rodolfo Abinader Corona is the current president of the nation. TCRLA reported in April 2019 that the Dominican To related that Juan Del Rosario of the UASD Economic Faculty cited a current economic slowdown for the Dominican Republic and cautioned that if the trend continues, growth would reach only 4% by 2023. Mr. Del Rosario said that if that happens, "we'll face difficulties in meeting international commitments." An ongoing concern in the Dominican Republic is the inability of participants in the electricity sector to establish financial viability for the system. Fitch Ratings, in December 2021, revised the Outlook on Dominican Republic's Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Negative and affirmed the IDRs at 'BB-'. The revision of the Outlook to Stable reflects the narrowing of Dominican Republic's government deficit and financing needs since Fitch's last review resulting in the stabilization of the government debt/GDP ratio, as well as the investment-driven economic momentum, reflected in the faster-than-expected economic recovery in 2021 that Fitch expects to carry into above-potential GDP growth during 2022 and 2023. Standard & Poor's, also in December 2021, revised its outlook on the Dominican Republic to stable from negative. S&P also affirmed its 'BB-' long-term foreign and local currency sovereign credit ratings and its 'B' short-term sovereign credit ratings. The stable outlook reflects S&P's expectation of continued favorable GDP growth and policy continuity over the next 12 to 18 months that will likely stabilize the government's debt burden, despite lack of progress with broader tax reforms, S&P said. A rapid economic recovery from the downturn because of the pandemic should mitigate external and fiscal risks. Moody's affirmed the Dominican Republic's long-term issuer and senior unsecured ratings at Ba3 and maintained the stable outlook in March 2021. ============= J A M A I C A ============= [*] JAMAICA: UK Seeking to Expand Trade With Country ---------------------------------------------------- RJR News reports that the United Kingdom is looking to expand trade with Jamaica. In that regard, British High Commissioner Judith Slater has asserted that her country is seeking to narrow the trade gap with increased business ventures and linkages, according to RJR News. Ms. Slater, who is attending the Invest Jamaica Business Conference in Montego Bay, told Radio Jamaica’s business reporter Javaughn Keyes that some key areas are being earmarked for this initiative, the report notes. Among these, she cited the BPO sector, where "hopefully a British company is coming into that sector," a bamboo byproducts initiative, "which is moving forward," and in the renewable energy sector, she said there were several British firms seeking to enter the Jamaican market, particularly in the solar energy sub-sector, the report discloses. The High Commissioner noted that the UK does "about" GBP3.5 million trade and investment annually in the region, "but Jamaica is a small proportion of that, and it really should be bigger," the report relays. Noting Jamaica's reputation for "punching above its weight," she said it was important to take advantage of that in the effort to close the trade gap between the two countries, the report adds. As reported in the Troubled Company Reporter-Latin America in March 2022, Fitch Ratings has affirmed Jamaica's Long-Term Foreign Currency Issuer Default Rating (IDR) at 'B+'. The Rating Outlook is Stable. ===================================== T R I N I D A D A N D T O B A G O ===================================== TRINIDAD & TOBAGO: Stable Exchange Rate Containing Inflation ------------------------------------------------------------ Andrea Perez-Sobers at Trinidad Express reports that Finance Minister Colm Imbert said that the Government has implemented several policies to keep inflationary pressures contained. Speaking at the 13th Annual International Finance and Accounting Conference (AIFAC 2022) at the Hyatt Regency, Imbert said inflationary pressures are being firmly anchored by the Government's stable exchange rate policy, which has been made possible by the country's considerable reserve buffers, according to Trinidad Express. "As a result, import costs in Trinidad and Tobago have not increased as drastically as they would have under a flexible exchange rate system. The Central Bank has also assisted the process by keeping the repo rate at a moderate level," he said, the report notes. He said the Government has managed to place its fiscal accounts on a more sustainable basis, the report relays. He said the fiscal accounts have therefore been stabilised and placed on a much better trajectory, to achieve positive fiscal balances in the coming years, the report dicloses. "Indeed, due to the prudent management of the economy, the growth of the domestic economy is expected to be 2.0 per cent in 2022. Furthermore, it is expected that the overall balance of payments will record surpluses, driven by positive outturns in the energy and non-energy sectors and external demand, the report says. "These internal and external factors bode favourably for export revenues throughout the year. Net official reserves are anticipated to stay strong and healthy throughout 2023 and surpass US$8 billion in 2024 and the current account balance is forecast to stand at US$ 2.5 billion in 2024," Imbert highlighted, the report relays. He reiterated that property tax implementation is anticipated to commence in the fiscal 2023, once the Valuation Rolls are completed, starting with residential taxes, the report says. He noted that thus far, the ministry has crossed the required threshold of 50 per cent of properties in terms of gathering information, the report notes. Gambling Control Commission Giving an update on the Gambling Control Commission, he said this was operationalised by the Government after sections of the Gambling (Gaming and Betting Control Act) were partially proclaimed in June 2021, the report relays. "The Government has established the Board of Commissioners, and is currently working to recruit staff, acquire information technology to support compliance and tax collection, acquire and outfit physical facilities, design business processes, initiate staff specialised training, and create a strategic plan. Accordingly, the Commission anticipates generating significant Government revenue from gambling in 2023," he added. With respect to oil investment, Imbert said in fiscal 2022, over $1 billion in non-oil investments became operational, creating over 1,500 jobs, including investments in a wide range of activities, which will be pursued in 2023 to promote and facilitate local and foreign direct investments, the report relays. Disruptions Imbert said that with supply-chain disruptions and the Russia-Ukraine conflict, Government borrowing has been a valuable tool used for financing investments in productive sectors that are critical to achieving diversified growth and sustainable development, the report notes. "However, this has led to increased debt-to-GDP (Gross Domestic Product) ratios internationally and domestically. Trinidad and Tobago's debt-carrying capacity depends on various factors including the quality of institutions and debt management capacity, policies, and macroeconomic fundamentals," Imbert explained, the report discloses. Therefore, he indicated, that to maintain a good debt-carrying capacity, the capability of several institutions such as the Debt Management Division, the Treasury Division and the Investments Division in the Ministry of Finance as well as the Central Bank of Trinidad and Tobago has been strengthened to execute their roles of monitoring and evaluating debt levels, the report adds. ********* S U B S C R I P T I O N I N F O R M A T I O N Troubled Company Reporter-Latin America is a daily newsletter co-published by Bankruptcy Creditors' Service, Inc., Fairless Hills, Pennsylvania, USA, and Beard Group, Inc., Washington, D.C., USA, Marites O. Claro, Joy A. Agravante, Rousel Elaine T. Fernandez, Julie Anne L. Toledo, Ivy B. Magdadaro, and Peter A. Chapman, Editors. Copyright 2022. All rights reserved. ISSN 1529-2746. This material is copyrighted and any commercial use, resale or publication in any form (including e-mail forwarding, electronic re-mailing and photocopying) is strictly prohibited without prior written permission of the publishers. Information contained herein is obtained from sources believed to be reliable, but is not guaranteed. The TCR Latin America subscription rate is US$775 per half-year, delivered via e-mail. Additional e-mail subscriptions for members of the same firm for the term of the initial subscription or balance thereof are US$25 each. For subscription information, contact Peter A. Chapman at 215-945-7000. . * * * End of Transmission * * *