Argentina's Country Risk Surges Amid Election Uncertainty and Debt Maturity Concerns

Argentina's country risk surged to its highest level in nearly two years, driven by investor concerns over upcoming presidential elections and a significant debt maturity schedule in 2027. The country faces USD 20 billion in sovereign debt maturities next year, with USD 12 billion owed to private creditors and USD 7.5 billion to the IMF. The rising risk comes amidst a backdrop of poor macroeconomic data, including a drop in consumption and an increase in poverty levels. The Treasury is currently conducting short-term debt auctions to manage maturities, but it is not offering papers with maturities beyond the next presidential term. Experts suggest that the market is punishing Argentina due to the deterioration of its real economy and the decreasing probability of President Javier Milei's re-election.