Argentina’s Country Risk Plunges Below 700 Basis Points
This week, Argentina’s country risk broke below the 700-basis-point barrier, reaching levels not seen since early 2019.
The benchmark index, compiled by JPMorgan, fell 24 points to 681 basis points ahead of the year’s end. Meanwhile, over-the-counter bonds rose by an average of 1.1%, reaching parity levels close to 75%.
Experts attribute the market’s strength to factors such as a successful tax amnesty program, ongoing disinflation, and the fiscal surplus achieved under President Javier Milei.
GDP Performance
Argentina’s Gross Domestic Product (GDP) fell during the third quarter of the year. According to figures from the National Institute of Statistics and Censuses (INDEC), the indicator declined by 2.1% year-over-year, following a 1.7% drop in the previous quarter.
However, compared to the previous quarter, GDP grew by 3.9%.
On the demand side, all components saw quarterly increases. Seasonally adjusted figures show that exports grew by 3.2%, private consumption rose by 4.6%, public consumption increased by 0.7%, and gross fixed capital formation surged by 12.0%.
For 2023, Argentina—the third-largest economy in Latin America—closed with a 1.6% contraction in GDP.
President Javier Milei is currently implementing a series of liberal reforms aimed at opening up the country’s economy based on libertarian principles. While markets have reacted very favorably so far, tangible benefits are yet to materialize.
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