Moody’s announced a credit rating decision on Thursday, attributing it to macroeconomic reforms that have helped reduce inflation and resume growth by the end of 2024.
The agency noted that Argentina’s economy grew by 5.9% in the first quarter of 2025, driven by domestic demand and a renewed sense of confidence.
Despite the improvement, Argentina’s debt remains in the ‘junk’ investment category.
“The upgrade reflects our view that the broad liberalization of foreign exchange controls and, to a lesser extent, capital controls, along with a new program with the IMF, support the availability of foreign currency liquidity and ease pressure on external finances. This reduces the likelihood of a credit event,” Moody’s stated.
In April, Argentina secured a new $20 billion loan from the International Monetary Fund, allowing the country to lift capital and currency controls.
Moody’s mentioned that “the gradual transition to a more open capital account and the ongoing removal of forex controls are initial steps toward sustainable external payments.”
The agency highlighted the slowdown in inflation, driven by effective changes in fiscal and macroeconomic policy, and economic reforms aimed at eliminating market distortions and attracting real investment.
Inflation was 55.9% annually in spring, compared to 211% at the end of 2023.
However, Moody’s noted that weak monetary reserves and “structural impediments to investment” remain challenges.
The agency argued that economic recovery and popular support for President Javier Milei’s adjustment policies before the October legislative elections “could give the government a stronger political mandate to accelerate its economic reform agenda.”
At the same time, Moody’s warned that the eventual removal of remaining controls “could reignite macroeconomic imbalances that would jeopardize the sustainability of the balance of payments.”
Milei, who took office at the end of 2023, implemented numerous austerity measures, including a significant depreciation of the Argentine peso by over 52%.
The President declared a public emergency in administrative, economic, financial, and energy matters in July 2024, which lasted for one year and concluded on July 7.
