Argentina’s Economic Risk Index Hits Six-Month Low Under Milei
Argentina’s economic risk index has reached its lowest point since April, marking a significant improvement in the country’s financial stability under President Javier Milei’s leadership. The index, created by JP Morgan, dropped to 1,169 basis points, reflecting the government’s efforts to maintain a fiscal surplus and lower inflation rates.
Financial experts believe this decrease in risk index could lead to more affordable credit for Argentina and attract new investments. Analysts recommend investing in sovereign dollar bonds, citing the fiscal surplus and secured funds for upcoming payments. They predict that the risk index could drop even further to 1,100 points with the possibility of additional financing.
Despite remaining high compared to other stable economies in the region, Argentina’s market variables are showing positive trends, with public debt parities reaching record levels. This suggests that Argentine bonds still hold significant potential in a normalizing scenario, despite challenging international market conditions.
The recent shift in the Federal Reserve’s rate cut cycle has created a more restrictive bias in the market, impacting global fixed-income markets.