Fitch Ratings upgraded Argentina’s rating from ‘CC’ to ‘CCC’ based on certain economic developments that improved the credit agency’s confidence in the ability of Javier Milei’s government to make upcoming debt repayments. foreign currency obligations without seeking to obtain any relief.
Among other things, Fitch highlighted that dollar inflows, driven by a successful tax amnesty started to increase international reserves and should continue to do so as they circulate through the financial system, supporting the sovereign’s access to dollars.
Furthermore, it is in favor of the country that the authorities are also studying various external financing optionsalthough none of them have come to fruition to date.
BCRA reserves have started to strengthen again after a mid-year setback, with private sector capital inflows more than offsetting capital outflows linked to sovereign external debt servicewhich also motivated Fitch Ratings to raise the credit rating.
On the political level, Milei advanced its reform program despite his party’s weak representation in Congress, he achieved some legislative victories and avoided major setbacks. Furthermore, the president maintains “favorable popular support” despite the suffering caused by economic adjustments.
The result of his match in the October 2025 midterm elections will be crucial to the economic outlook, either strengthening or undermining Milei’s ability to advance its agenda.
The Argentine government remains determined to economic stabilization program focused on a aggressive fiscal adjustment to cancel past monetary financing of the Central Bank of the Republic of Argentina, a moving parity exchange rate, negative real interest rates to reduce excess liabilities remunerated in pesos and the maintenance of exchange controls to support these policies.
Risks
Among the negative aspects for Argentina, Fitch indicated that risks to payment capacity persistas reflected in the “CCC” rating, given the still uncertain prospects for a transition towards monetary and exchange rate policies likely to ensure a lasting improvement in reserves and the resumption of market access.
Furthermore, Political differences with the IMF continue to cloud the outlook of a new program with new funding, and it is not yet clear whether and how quickly the upcoming change in the US administration could facilitate an agreement.
Likewise, the agency considers it likely that the maintenance of exchange controls restrict a strong rebound in investmentsalthough a new Regime of Incentives for Strategic Sectors (RIGI) and microeconomic reform efforts are expected to offer support.
Looking to the future, the possibility of policy reversals or political shocks that undermine stability The macroeconomic situation and the prospects for restoring market access could lead to a downgrade of the rating.
On the contrary, the sustained accumulation of international reserves and restoration of market access bonds, as well as any large-scale external financing, would lead to an improvement in the rating.
