PARIS - Ratings agency Moody’s left its note on Argentina’s bonds unchanged but lowered their outlook to “negative” in the wake of this week’s effective debt default, which is expected to accelerate the decline of the South American nation’s economy.

“Moody’s considers that non-payment of debt obligations to creditors after a grace period has expired is a default,” it said, adding that the move will add to existing inflationary pressures and worsen struggling foreign exchange reserves.

“Argentina is mired in stagflation with a GDP that declined 0.2 percent year-over-year during the first quarter and high inflation of over 30 percent, driven in good part by continued currency depreciation,” it said.  “The default is likely to exacerbate the economic contraction, increase pressure on the exchange rate, and push inflation even higher.” The agency kept its debt rating unchanged at “Caa1”. The fall in foreign reserves had led Moody’s to lower the rating from “B3” in March.  The country had already been declared in “restrictive default” on Thursday by the Fitch rating’s agency and “selective default” by Standard & Poor’s the day before. Both terms indicate that Argentina has defaulted on one or more of its financial commitments but continues to meet others.