Since assuming office one year ago, Mauricio Macri’s government has successfully implemented transformative reforms that should support a rebound in private investment. His actions to reverse the isolationist path Argentina was treading under his predecessor should also begin to lead to stronger growth, says a recently published report by Moody’s Investors Service.
Macri’s “get to business” attitude is resonating both at home and abroad. His administration reached an agreement with holders of defaulted sovereign bonds to restore the country’s access to international capital markets and is now in the process of revamping the country’s national statistics institute. The Argentine government has also increased fiscal transparency, and given the central bank greater autonomy, in turn helping to create better-operating conditions for the private sector.
“The improving institutional framework is the single greatest credit achievement of the first year of the Macri government,” Mauro Leos, vice president, and senior credit officer at Moody’s wrote in the report. “However, progress in consolidating these reforms may slow next year due to rising political pressures and external economic risks.”
Across the corporate sector, renewed access to international markets has provided financial relief to a number of Argentinian firms, but in a “broad range of sectors” says the agency. The continued improvement in credit fundamentals will be determined by the pace of the economic recovery, as well as the success of policymakers’ in their attempts to curb inflation in Argentina.
This is the first in our series on Argentina’s first year under Macri.
Photo Credit: Agencia Diarios y Noticias (DyN), Argentina