Fitch upgraded the credit rating of Argentine banks.

Fitch Ratings has upgraded the operational environment rating for Argentine banks from “CCC-” to “CCC,” while changing the outlook from negative to stable.

According to a report by the international credit rating agency, the challenges faced by Argentine banks have gradually eased due to the growth in private sector credit. Additionally, asset quality and profitability indicators have performed better than expected.

Despite the challenging environment, Fitch forecasts that credit growth will improve in 2025, driven by economic recovery, higher private credit demand, and the continued reduction in the banking sector’s exposure to the public sector. This will increase the banks’ capacity to lend to the private sector.

Fitch expects the recent trend of improvement in non-performing and non-productive loans to continue, while capital and liquidity ratios should remain strong, given that banks have relatively low direct exposure to the government.

Forecasts and Projections of Argentina

Fitch projects a 3.6% contraction in GDP for 2024, followed by a 3.9% rebound in 2025, with considerable uncertainty depending on the outcome of capital controls.

Real interest rates are also expected to turn positive as money demand recovers and the Central Bank normalizes monetary policy, while inflation decreases.

On a global scale, Fitch anticipates that both global and domestic interest rates will continue to fall until 2025, which will help reduce medium-term financing costs.

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ABOUT THE AUTHOR See More
Ignacio Teson
Ignacio Teson
Economist and Financial Analyst
Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.
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