It becomes indispensable that the government manages to advance in concrete actions that can recover confidence and reduce country risk.
Argentina’s insertion in the international stage has acquired a fundamental relevance in a context where Country risk works as a key indicator of the degree of confidence that we inspire on financial markets, investors and commercial partners. The country risk, invented by JP Morgan, measures the possibilities of compliance or breach of the external commitments of a country, comparing the performance of its bonds with the American treasure bonds.
Currently, Argentina has a country risk that fluctuates between 1100 and 1200 points, after reaching 2,400 in December 2023 and experiencing a considerable fall since the year started. However, these levels are still far from the lowest registered in the past, such as the 278 points in 1996, during the presidency of Carlos Menem, or the 697 points of July 2025, after political and economic episodes that have tested confidence in the country.
This index, although theoretical in its form, has very specific implications. A high country risk implies much higher interest rates in international credits, around 20% or more, making loans virtually unfeasible in favorable conditions for Argentina. The perception of political instability, past defaults, breaches with the IMF, and uncertainty regarding the level of institutionality, raise that risk, making access to cheap financing and limiting foreign investment opportunities that could boost the economy.
The current scenario, defined by a juncture marked by the deterioration of the climate of trust after the recent provincial elections in Corrientes and Buenos Aires, where the ruling party was severely defeated, makes a predictable one. persistent volatility in the country risk. In addition, economic reports reflect a tendency to deceleration, with a level of activity in clear setback after a brief recovery that occurred between March and June, and an increase in negative news related to corruption spotlights at the higher levels of the government.
The national and international press has intensified coverage on these issues, affecting both internal and external perception. The perception of political and economic instability, together with the endless defaults and programs breached with the IMF, generates in public opinion a loss of confidence that, in turn, affects investment decisions and the cost of financing.
In this context, it becomes indispensable that the government manages to advance in concrete actions that can recover confidence and reduce the country risk. The approval of Budget for 2026the formation of a Supreme Court with greater representation and the search to maintain a fiscal deficit objective close to 0% are essential steps to stabilize the economy and prosecute a country risk reduction path. A significant decrease in this index would open the doors to cheaper and more frequent access to international financing, contributing to Argentina to attract foreign direct investment, enhance its productive capacity and improve global competitiveness. The existence of abundant natural resources in mining, energy and agribusiness, accompanied by public and private coherent decisions, can turn Argentina into an unavoidable destination for international investment, provided there is a transparent, stable and reliable management.
Argentina’s international insertion is also not limited to financial variables. The signing of commercial agreements with countries and economic blocks such as the European Union, EFTA, Israel, Chile and Albania, reflects a strategic commitment of diversification and expansion of markets. The negotiation of the Agreement between Mercosur and the European Union, which could be signed in 2025, represents a significant opportunity for Argentina to expand its presence in high -purchasing power markets, increase its exports and favor sustained and diversified growth.
The export of nuts to Israel, the opening of the Chilean market for lemons and the entrance to Albania for bovine meat illustrate how the diversification of destinations and products can reduce vulnerability to international fluctuations and create new opportunities for the Argentine economy. Participation in agreements with EFTA, after almost a decade of negotiations, demonstrates the will to integrate Argentina into greater depth commercial blocks, facilitating access to high -capacity markets for buying and promoting investment flows.
The role of foreign direct investment (FDI) is fundamental in this recovery scenario. The Inter -American Development Bank emphasizes that to attract capital, Argentina must offer an investment climate that guarantees legal stability, modern infrastructure and regulatory conditions that favor investment. Foreign investment not only implies injection.
By Diego Guelar-Diplomatic and candidate for National Senator for UCEDE.
By Ezequiel Vega- Financial Analyst- former Ambassador of the Imbrics + in Argentina
Source: Ambito
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