Moodys has upgraded Argentinas credit rating from Ca to Caa3 with a positive outlook.
The agency praised President Javier Mileis fiscal adjustments for reducing economic imbalances.
This improvement reflects Argentinas decreased risk of default and better debt repayment capacity.Mileis government has significantly cut public debt from 156% of GDP in 2023 to 77% in 2024.
Projections suggest a further decrease to 50% by 2026.
Inflation has also dropped dramatically, falling from 25.5% in December 2023 to 2.7% in December 2024.Despite these gains, Moodys warns of potential external vulnerabilities following the removal of exchange and capital controls.
The agency also highlights climate risks, given Argentinas heavy reliance on its agricultural sector.
The severe drought in 2023 negatively impacted this crucial industry.Moodys Boosts Argentinas Credit Rating, Citing Fiscal Progress Under Milei.
(Photo Internet reproduction)Social inequality and internal political tensions remain concerns for Argentinas stability.
These factors could potentially hinder the countrys economic progress if not addressed effectively.
Moodys emphasizes the importance of managing these issues for long-term growth.The agency forecasts 3% growth for Argentina in 2025, placing it among the best-performing economies since the pandemic.
However, the risk of difficulties with international reserves continues to be a significant concern for the countrys financial stability.Moodys Boosts Argentinas Credit Rating, Citing Fiscal Progress Under MileiMileis administration has focused on reducing inflation and stimulating economic growth since taking office in December 2023.
The presidents approach included drastic measures such as cutting the number of ministries from 18 to 9.The government has also halted most public works projects and reduced funding for provinces, education, and healthcare.
These bold moves have contributed to the slowing of monthly inflation rates since Mileis inauguration.Moodys concludes that the success of fiscal policies and maintaining financial stability are crucial for Argentinas sustainable long-term growth.
The agencys positive outlook reflects confidence in the current economic direction, despite lingering challenges.