Argentina's Country Risk Index has dropped below 1,000 points

[earlyretirement]

Argentina's country risk (Riesgo Pais) has seen a significant improvement, breaking through the 600-point threshold and approaching the Latin American average of 406 basis points as of January 7, 2025.

This development marks a substantial positive shift in Argentina's economic outlook and financial standing on the global stage

.The country risk index, calculated by JP Morgan, has been steadily falling due to rising optimism in Argentine financial markets. This decline coincides with several positive economic indicators:Fiscal Performance: Argentina ran a fiscal surplus for the first time in many years between January and September 2024.

Inflation Control: Monthly inflation decreased from a peak of 25.5% in December 2023 to 4.2% in August 2024.

Bond Performance: Dollar-denominated bonds have seen daily increases of up to 1.8%.The dramatic reduction in country risk opens up significant opportunities for both the government and companies. Access to International Debt Markets: With the risk index approaching the Latin American average, Argentina is now in a much better position to access international credit markets.

Lower Borrowing Costs: The decreased risk perception should translate into lower interest rates for Argentine bonds, reducing the cost of borrowing for both the government and private sector.

Increased Foreign Investment: Improved risk ratings typically attract more foreign direct investment, which could boost economic growth and job creation.

 

[earlyretirement]

Argentina's country risk continues to drop. Dropping today another 3.08% to 692.

Riesgo País | Ámbito

Seguí las últimas noticias sobre Riesgo País en Argentina. Información, novedades y última hora.

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[Pink Panther]

It is falling like a rock now that the IMF is close to giving more funds.

 

[BuySellBA]

Argentina's Country Risk (Riesgo Pais) as measured by JP Morgan plummeted this morning 19.08% to 725.

JP Morgan updated Argentina’s country risk to 725 basis points, representing a decrease of 19.1%. This is significant because the country risk, measured by JP Morgan’s EMBI index, reflects the difference in yield between Argentine sovereign bonds and US Treasury bonds, which are considered the world’s safest assets. A drop in this indicator means investors perceive a lower probability of default or non-payment of Argentina’s debt, which usually translates into better financing conditions for the country and greater confidence in its economy.

Recent Context of Argentina’s Country Risk

At the beginning of 2025, Argentina’s country risk had been trending downward, even breaking below the 600 basis point mark—a low not seen since 2018—driven by signs of fiscal and monetary prudence and progress on structural reforms.

However, during the first quarter of the year, the indicator rose again, reaching peaks of up to 873 points amid regional and global volatility and concerns about reserve accumulation and meeting debt commitments.

The recent drop to 725 basis points (-19.1%) suggests an improved risk perception, possibly linked to successful debt payments, progress in negotiations with international organizations, or signs of macroeconomic stability.

Regional Comparison

Despite the improvement, Argentina’s country risk remains one of the highest in Latin America, surpassed only by countries like Venezuela and Bolivia. In contrast, economies such as Brazil, Chile, Uruguay, and Peru have significantly lower indicators, reflecting greater stability and lower perceived risk among international investors.

Why Is This Drop Important?

Lower country risk reduces the external financing cost for the Argentine government and companies.
It improves investor perception and can attract capital, supporting economic recovery.

It is a key barometer for markets and economic policy, as it summarizes confidence (or lack thereof) in the country’s ability to meet its financial obligations.

JP Morgan’s update placing Argentina’s country risk at 725 basis points, with a significant decrease, is a positive signal for markets and the economy. However, the country still faces challenges to consolidate this trend and move closer to the risk levels of its regional peers.