Argentina's country risk hits lowest point under Milei after credit upgrades

Argentina's country risk has fallen 11% to below 450 basis points, reaching its lowest level during President Javier Milei's administration. This significant decrease follows credit rating agencies S&P and Fitch upgrading Argentina's sovereign debt ratings, with S&P moving it from CCC+ to B-.

The indicator, currently at 446 basis points, has not been this low since May 2, 2018. The drop has refocused attention on the historical trajectory of Argentina's country risk, which serves as a key barometer of the nation's economic, political, and financial cycles over the past two decades.

The article traces this historical performance, noting a sharp rise during Fernando de la Rúa's presidency amid doubts about the convertibility plan and public debt. The crisis and default in December 2001 sent the indicator to record highs. Subsequent interim presidencies and Eduardo Duhalde's term saw the index peak at a historic 7,222 basis points in August 2002, reflecting the financial fallout from exiting convertibility and currency devaluation.

Néstor Kirchner's presidency marked a period of significant compression in country risk, with economic recovery, fiscal surpluses, and debt restructuring bringing the index below 500 points by 2005 and reaching a low of 184 points in early 2007. However, tensions related to inflation and government intervention began to emerge later in his term.

Cristina Kirchner's two terms saw more volatile country risk. While avoiding the peaks of the 2001 crisis, the index experienced sharp increases during periods of high uncertainty, such as the 2008 global financial crisis following Lehman Brothers' collapse, the nationalization of pension funds (AFJP), and the legal dispute with holdout creditors that led to a selective default in 2014.