May 5 - Fitch Ratings on Tuesday moved Argentina's long-term issuer default rating for both foreign and local currency to "B-" from "CCC+", and assigned a stable outlook.
The upgrade was justified by the agency on the basis of several core improvements: better fiscal and external balances, tangible progress on economic reforms, and what Fitch described as improved prospects for accumulation of foreign exchange reserves. The agency also said it expects the government to secure financing sufficient to meet its debt obligations.
At the same time, Fitch underlined ongoing vulnerabilities in Argentina's macroeconomic profile. The report identified weak international reserves, persistent high inflation and a long-standing record of macroeconomic instability as factors that continue to weigh on the country’s creditworthiness.
Fitch forecast a moderation in economic activity, projecting growth to ease to 3.2% in 2026.
The ratings note also referenced a political shift following the October 2025 midterm elections. Fitch said the elections strengthened President Javier Milei's political coalition, allowing the administration to push forward structural changes.
Among the reforms cited were a labor program that extended the working day and new legislation designed to relax mining restrictions in areas containing glaciers. Those measures were singled out by Fitch as part of the government’s broader push to alter regulatory and labor frameworks.
"With this move, Argentina has crossed a key threshold in international markets," said Argentina’s Political Economy Secretary Jose Luis Daza in a post on X. "Thousands of institutional funds are currently unable to invest in CCC-rated instruments. Now they will be able to invest in Argentine bonds," he added.
The ratings action comes against a backdrop of fiscal conservatism under President Milei’s administration. The government has made preserving fiscal balance a central policy objective and has used its veto power to block laws it sees as a threat to that goal. Those moves have reduced budgets in certain social sectors and drawn criticism from affected groups.
Inflation, while down from peak levels, has remained sticky recently, with exchange-rate depreciation and rising utility prices cited as contributors. Economic expansion has been uneven across the economy, concentrated mainly in energy, mining and agriculture.
Fitch’s upgrade marks a shift in international market access for Argentina, even as the agency and local officials acknowledge that notable economic and financial risks remain.