Argentina Country Risk Rating

Argentina’s overall risk remains medium high. President Javier Milei’s administration continues to be popular but with fragmenting support as the winners from economic growth have so far not been widespread and intermittent squeezes have been seen on real wages. Unemployment has also started to drift up, as the exports boom bypasses certain sectors. Additionally, the government has seen tensions rise with Lula administration in Brazil, as Milei has directly supported Flavio Bolsonaro – which could slow progress on a Latam trade agreement with 3rd party countries. We still think the October/November 2027 presidential election could be close, though opposition parties need to unify around a credible candidate. It is also worth remembering that polls underestimated Milei’s support ahead of October 2025 elections. Meanwhile, Milei’s relationship with the Trump administration remains very good, with Milei having supported Trump’s pivot toward the Americas in the U.S. security strategy, leading to a new bilateral trade deal agreed with the U.S. earlier in the year.

Economically, Argentina’s GDP growth is projected to maintain momentum with a positive growth of 3.5% in 2026, forecast by the IMF. Growth is also being helped by multi-year macroeconomic confidence, with inflation still coming down; the economy rebounding; FX reserves climbing and fiscal policy under control. Additionally, Argentina continues to benefit from the 4-year USD20bn IMF Extended Fund Facility, with the 3rd review in July 2026 highlighting Argentina’s progress. However, Argentina remains the IMF’s largest debtor and still has an overall government debt projected to be 70.4% of GDP in 2026, with a large set of repayments due in 2027. Pre-election political instability could hurt financing in 2027 and the economic momentum. Thus sovereign non-payment risk stays at medium. Inflation has also been on a downward trend since 2024 but progress has slowed with an increase in energy and utility prices and the IMF now forecasts inflation to be 30.4% in 2026, according to the April 2026 World Economic Outlook (WEO) report. Finally, the risk of doing business continues at a high level.