They warn about the external deficit and recommend the national government have a "Plan B" ready after the elections.
A new economic report has raised a red flag regarding Argentina 's external situation. While the ruling party is banking on an electoral victory to reduce country risk and facilitate financing, IERAL —the think tank of the Mediterranean Foundation —warns that the government should prepare a "Plan B" for a potential adverse scenario after October .
The warning comes amid a surge in tourism spending, an appreciating peso, and a lack of response in foreign direct investment. According to IERAL projections, the current account balance of payments would close 2025 with a deficit of USD 14 billion, equivalent to 2 percentage points of GDP.
The report, signed by economist Jorge Vasconcelos , highlights that the government plans to cover this external deficit and refinance principal maturities averaging USD 12.5 billion in 2026 and 2027, banking on a sharp drop in country risk if it achieves good electoral results. However, Vasconcelos warns that this ideal scenario may not materialize.
" The challenge is significant, and it would be prudent to start thinking about a 'Plan B' if the country risk cannot be brought close to 500 points by the end of the year ," the report states. In this context, it suggests strengthening the fiscal surplus to prevent the adjustment from impacting investment, especially if external conditions become more difficult.
Is public debt declining? Although there is still debate about how to account for interest, the key to assessing fiscal sustainability is the evolution of debt as a percentage of GDP. Measured this way, the picture is clear: it's falling.
@marcapello and @nicocampoli analyze it pic.twitter.com/MpMHIdVwdv
The report reviews several critical points that affect macroeconomic sustainability:
- The balance of real services, such as tourism, maintains a monthly deficit of close to USD 1 billion.
- The formation of external assets—following the partial lifting of restrictions on individuals—soared to a monthly deficit of USD 2.8 billion in the second quarter.
- Foreign direct investment continues to show no signs of recovery, with a deficit of USD 300 million per month.
Beyond the technical debate, what the numbers show is that the debt burden is shrinking. And if fiscal balance and growth are maintained, the outlook looks less fragile than in previous years. pic.twitter.com/mkNgSINpoM
— Mediterranean Foundation (@FMediterranea) July 11, 2025
Added to this is the appreciation of the bilateral real exchange rate, which in June stood at 13.3% below the average between 1997 and 2025, affecting export competitiveness.
If the country risk reduction fails to materialize, the government should opt for a more severe adjustment in public spending. Otherwise, IERAL warns, the adjustment variable could be investment, which would negatively impact economic recovery.
Beyond the technical debate, what the numbers show is that the debt burden is shrinking. And if fiscal balance and growth are maintained, the outlook looks less fragile than in previous years. pic.twitter.com/mkNgSINpoM
— Mediterranean Foundation (@FMediterranea) July 11, 2025
" If Argentina were to face difficulties financing the deficit in its external accounts, the macroeconomic situation would require a larger primary surplus to prevent investment from being the adjustment variable ," the study concludes.
For now, the Casa Rosada is betting everything on political success in September and October . But if that support isn't enough to convince the markets, "Plan B" could become the only option to maintain stability.
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