Investment announcements fail to calm markets as country risk hits 2026 high

The “Argentina Week” that took place in Paris over the last few days was filled with investment announcements and government initiatives to attract foreign capital.

Announcements for investment projects in energy, mining, and the automotive industry, for instance, totaled US$27 billion. 

It was also confirmed that the Final Investment Decision (FID) for Argentina LNG — the largest investment in the country’s recent history at US$51 billion — will be signed on November 26. This project will allow Vaca Muerta gas to be exported as liquefied natural gas (LNG). 

Another development was the Argentina Citizenship by Investment Program, an initiative that will allow individuals to apply for citizenship through a US$350,000 contribution to the government or the purchase of a public bond for US$800,000.

The problem, however, is that not even that battery of announcements managed to calm the market. 

The clearest example of this is that the JPMorgan EMBI+ index for Argentina, known as “country risk,” which reflects the interest rate Argentina would pay to borrow abroad, has not stopped climbing. 

At closing time Friday, country risk stood at 650 points, the highest it has been since December 2025. 

The index is derived from the performance of that nation’s debt bonds in the international debt market. This means that if the value of the bonds falls, country risk rises. 

Global problems worsened by local dynamics Argentina’s volatility is not happening in a vacuum. For weeks, bonds from major global economies have been experiencing a massive sell-off. This caused a yield increase to counteract the price drop.

That sell-off was caused by a combination of factors: rising global inflation, concerns over high spending levels, and competition for financing with large companies driving AI development (known as “hyperscalers”). 

For example, the yield on the 10-year United States Treasury bond — a  global economy thermometer — hit 5.34% this week, its highest level since 2004. 

Analysts at the brokerage firm Portfolio Personal Inversores (PPI) explained in their latest report that, although Argentina followed the global trend, it did so with “a significantly larger correction” than other emerging economies. 

The report explains that this is due to a series of “local uncertainties” for which investors are demanding an additional premium.

Uncertainty heading toward 2027 One of the points highlighted was the slowdown in reserve purchases by the Central Bank in recent months. 

That effect was felt strongly in September, when the bank only accumulated a net US$473 million, the lowest monthly balance of 2026. By way of comparison, it acquired US$768 million in August and US$2 billion in July.

This, in turn, raises doubts about the government’s dollar financing. In 2027, the Milei administration will have to face maturities of nearly US$25 billion. Close to US$12 billion belongs to private bondholders, while US$7.5 billion is for the International Monetary Fund (IMF). 

“The global context helps explain the direction of the declines, but domestic factors continue to amplify their magnitude and the increase in the cost of sovereign financing,” the PPI report added, referencing political uncertainty regarding the 2027 elections, as investor dollarization puts pressure on the exchange rate during pre-election periods.