S&P Global Ratings announced an upward revision of Argentina's sovereign credit profile, moving its long- and short-term local and foreign currency ratings to 'B-/B' from 'CCC+/C'. The ratings action also included an upgrade of the transfer and convertibility assessment to 'B' and the issue ratings on both foreign- and local-currency bonds to 'B-'. The outlook on the long-term ratings was set as stable.
The agency attributed the upgrade to a mix of factors that together eased Argentina's economic vulnerabilities and bolstered its external liquidity position, creating conditions more supportive of an ongoing economic recovery. Central to S&P's assessment were continued fiscal surpluses and a narrowing of economic imbalances, including a reduction in inflation.
S&P highlighted that the central bank's accumulation of foreign exchange reserves strengthened the government's overall liquidity profile when combined with fiscal improvement. Reserve accumulation intensified in 2026, with the central bank's purchases of U.S. dollars surpassing $10 billion during the first five months of the year, the agency noted.
On the financing side, the government accessed additional resources through multiple channels: the issuance of U.S. dollar-denominated bonds in the local market, guarantees from official lenders, and repurchase agreements with global banks used to meet amortization payments on commercial external debt. These funding operations were presented by S&P as important contributors to the country's improved liquidity position.
Looking at near-term external balance dynamics, S&P expects a slight current account deficit of -0.2% of GDP in 2026, an improvement from an estimated -1.1% in 2025. The rating agency also projected real GDP growth of 2.7% in 2026 and roughly 3% in subsequent years.
On inflation, S&P anticipates a moderation in average annual inflation to 32% in 2026 from 42% in 2025, with a further decline toward 9% by 2029. The agency also noted recent legislation enacted by the administration that includes commitments on fiscal and foreign exchange policies and provides regulatory stability for large investments under the RIGI program.
Despite the upgrade, S&P maintained a stable outlook to reflect a balance between the improvements it identified - fiscal outcomes and enhanced liquidity - and ongoing economic vulnerabilities that persist. The agency expects the general government balance to post a modest deficit of 0.7% of GDP in 2026 and deficits averaging about 1% of GDP in 2027-2029.
Methodology note: The rating change and projections referenced above reflect S&P Global Ratings' published assessment and forward-looking expectations as presented in its announcement.