Argentina

This report does not constitute a rating action. Overview Institutional and economic profile Flexibility and performance profile Near-term uncertainty around post-election policy formulation and execution juxtaposed with promising longer-term natural resource-driven economic opportunities. Fiscal, monetary, and foreign exchange imbalances present a challenging policy adjustment scenario for 2024 and 2025. This year?s presidential elections epitomize polarization across Argentina?s political spectrum and disenchantment with the established political class. High inflation reflects various macroeconomic imbalances, including central bank financing of unsustainable fiscal deficits, and is part of a longer track record of price instability, lack of confidence in the Argentine peso as a store of value, and weak monetary policy credibility. Widespread macroeconomic imbalances indicate the need for concerted policy correction by the

...All eyes are focused on this year's presidential elections, particularly because the August primaries saw libertarian presidential candidate and political outsider Javier Milei--calling for dollarization--garner the most votes, contrary to predictions. This result sets the stage for competitive and uncertain elections in October (the first round) and November (second round). Mr. Milei faces established politicians Sergio Massa (Uni=n por la Patria; UP) and Patricia Bullrich (Juntos por el Cambio; JxC). External markets will likely remain closed to Argentina pending execution of policy under the next administration due to uncertainty about its capacity and willingness to pay. This...

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