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Argentina's Credit Soars: Moody's Upgrade Boosts Reform Hopes
22 Jul
Summary
- Moody's upgraded Argentina's credit score to B3, signaling reduced default risk.
- This upgrade marks the third major rating increase in less than three months.
- Economic reforms under President Javier Milei are reportedly gaining strong support.
Moody's Ratings has upgraded Argentina's sovereign credit score to B3 from Caa1, accompanied by a positive outlook. This action represents the third significant rating increase for the country in under three months, providing substantial backing for President Javier Milei's economic reform program.
Analysts at Moody's indicated a material decline in Argentina's default risk. They observed that macroeconomic stabilization has progressed beyond initial adjustments into more durable credit fundamental improvements. Factors such as stronger exports, increased foreign direct investment in energy and mining, enhanced access to external financing, and signs of better governance were highlighted.
This upgrade follows similar positive actions from Fitch Ratings and S&P Global Ratings in recent months. These agencies acknowledged Milei's progress in stabilizing fiscal accounts and reducing inflation from triple-digit rates. The positive outlook suggests potential for further upgrades if external finances continue to improve alongside macroeconomic stability.
Despite the positive momentum, Moody's cautioned about remaining risks, particularly leading up to the 2027 presidential election. However, the agency noted a narrowing range of possible policy outcomes, potentially increasing the likelihood of policy continuity.
