In a significant endorsement of President Javier Milei’s economic policies, Fitch Ratings has upgraded Argentina’s long-term foreign and local currency issuer default ratings from “CCC” to “CCC+”. This marks the first such upgrade since Milei assumed office, reflecting growing international confidence in his administration’s reform agenda.

The upgrade is attributed to the initiation of a new $20 billion Extended Fund Facility agreement with the International Monetary Fund (IMF) and the liberalization of Argentina’s foreign exchange market. These measures have bolstered the country’s external liquidity and are expected to support ongoing economic recovery and disinflation efforts

Analysts note that while the “CCC+” rating remains within the high-risk category, the improvement signals a positive trajectory for Argentina’s economic stability. The government’s commitment to fiscal austerity, including significant spending cuts and the removal of currency controls, has been instrumental in this development.

This upgrade may lead to reduced borrowing costs and improved access to international credit markets for Argentina. However, Fitch cautions that sustained progress will depend on the government’s ability to maintain its reform momentum and navigate upcoming political challenges, including midterm elections later this year.

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