Fitch raises Argentine debt rating, but remains in the speculative category

Washington. The rating agency Fitch increased Argentina’s long-term debt rating one step this Friday, from ‘CC’ to ‘CCC’, although it kept it in the speculative category.

The increase in the debt rating of the South American country reflects developments that have improved Fitch’s confidence in the authorities’ ability to make upcoming repayments of foreign currency obligations without seeking debt reliefthe agency detailed in a statement.

Dollar inflows generated by a successful tax amnesty began to increase international reserves and should continue to do so as they circulate in the financial system, thus sustaining access to the dollarthe agency added.

Fitch points out, however, that risks weigh on the repayment capacity (…) given the still uncertain prospects for a transition towards monetary and exchange (currency) policies that ensure a lasting improvement in reserves and reactivate market access of capitals.

Argentina faces significant debt payments of $4.3 billion in January and July 2025, in addition to approximately $2.3 billion in foreign currency bond payments scheduled by the central bank and $2.7 billion by the central bank. of the provincial governments, he calculated. Argentina’s current international reserves, which are around 30 billion dollars, remain low and insufficient to make those paymentsFitch added.

In 11 months, the government of far-right Javier Milei recovered fiscal balance at the cost of a harsh adjustment with drastic cuts to public spending. More than half of the population in Argentina lives in poverty, according to official statistics.

The International Monetary Fund predicts that the Argentine economy will contract 3.5 percent this year, before growing 5 percent in 2025.

Inflation continued to decline in October although it remains among the highest in the world, at 193 percent annually.