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Fitch Upgrades Argentina’s Debt Rating from “CCC” to “CCC+”: Causes and Context
Today, May 12, 2025, Fitch Ratings upgraded Argentina’s sovereign debt rating from “CCC” to “CCC+”, reflecting an improved international perception of the country’s ability and willingness to meet its financial commitments. However, the rating still places Argentina in high credit risk (“junk”) territory, indicating that structural challenges remain.
Main Reasons for the Upgrade
New IMF Agreement: The primary reason cited by Fitch is the implementation of a new program with the International Monetary Fund, involving $20 billion in financing over four years. The first disbursement of $12 billion in April strengthened Argentina’s external liquidity and significantly improved its international reserves. This multilateral support is key for the country’s financial stability.
Liberalization of the Foreign Exchange Market: Since April 2025, President Javier Milei’s government has dismantled most currency controls, allowing the Argentine peso to float within a set band. This measure facilitated the inflow of foreign currency, improved market confidence, and laid the groundwork for further accumulation of international reserves.
Fiscal and Macroeconomic Improvements: The government’s fiscal adjustment turned a primary federal deficit of 2.3% of GDP in 2023 into a surplus of 1.8% in 2024. Fitch projects a continued primary surplus in 2025. Additionally, the economy has shown signs of recovery and inflation has begun to decelerate faster than previously expected.
Disinflation: Projections from Fitch and private consultancies anticipate monthly inflation dropping below 2% by the last quarter of 2025, with annual inflation estimated at around 28-30% for December. This is thanks to a combination of fiscal discipline, tight monetary policy, and exchange rate stability.
Javier Milei’s rise to the presidency in 2023 marked a radical shift in Argentina’s economic policy, with a liberal reform program aimed at reducing public spending, eliminating state controls, and attracting investment. These measures, though controversial and resisted by some sectors, have been viewed by markets as positive signals of structural change.
The rating upgrade comes amid moderate optimism in the markets, with Argentine debt being one of the most profitable emerging market investments in 2024.
However, Fitch warns that access to international credit markets remains costly and limited, and that reserve accumulation is not guaranteed under the new exchange rate regime, especially if the government prioritizes a strong peso.
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Today, May 12, 2025, Fitch Ratings upgraded Argentina’s sovereign debt rating from “CCC” to “CCC+”, reflecting an improved international perception of the country’s ability and willingness to meet its financial commitments. However, the rating still places Argentina in high credit risk (“junk”) territory, indicating that structural challenges remain.
Main Reasons for the Upgrade
New IMF Agreement: The primary reason cited by Fitch is the implementation of a new program with the International Monetary Fund, involving $20 billion in financing over four years. The first disbursement of $12 billion in April strengthened Argentina’s external liquidity and significantly improved its international reserves. This multilateral support is key for the country’s financial stability.
Liberalization of the Foreign Exchange Market: Since April 2025, President Javier Milei’s government has dismantled most currency controls, allowing the Argentine peso to float within a set band. This measure facilitated the inflow of foreign currency, improved market confidence, and laid the groundwork for further accumulation of international reserves.
Fiscal and Macroeconomic Improvements: The government’s fiscal adjustment turned a primary federal deficit of 2.3% of GDP in 2023 into a surplus of 1.8% in 2024. Fitch projects a continued primary surplus in 2025. Additionally, the economy has shown signs of recovery and inflation has begun to decelerate faster than previously expected.
Disinflation: Projections from Fitch and private consultancies anticipate monthly inflation dropping below 2% by the last quarter of 2025, with annual inflation estimated at around 28-30% for December. This is thanks to a combination of fiscal discipline, tight monetary policy, and exchange rate stability.
Javier Milei’s rise to the presidency in 2023 marked a radical shift in Argentina’s economic policy, with a liberal reform program aimed at reducing public spending, eliminating state controls, and attracting investment. These measures, though controversial and resisted by some sectors, have been viewed by markets as positive signals of structural change.
The rating upgrade comes amid moderate optimism in the markets, with Argentine debt being one of the most profitable emerging market investments in 2024.
However, Fitch warns that access to international credit markets remains costly and limited, and that reserve accumulation is not guaranteed under the new exchange rate regime, especially if the government prioritizes a strong peso.
Fitch Upgrades Argentina’s Debt Rating from “CCC” to “CCC+”: Causes and… | Michael Koh
Fitch Upgrades Argentina’s Debt Rating from “CCC” to “CCC+”: Causes and Context Today, May 12, 2025, Fitch Ratings upgraded Argentina’s sovereign debt rating from “CCC” to “CCC+”, reflecting an improved international perception of the country’s ability and willingness to meet its financial...
