Fitch warns of bankruptcy in Argentina

The election slap of the Argentine President Mauricio Macri has shaken the confidence of the US rating agency Fitch in the country severely. The institute lowered the rating of the country’s credit rating last night by two levels to „CCC“. Thus, according to Fitch, defaults can only be avoided if the trend is favorable.

The outcome of the election had increased political uncertainty and severely limited financing conditions, the experts concluded. In addition, the economic environment is likely to deteriorate, which increases the likelihood of a state bankruptcy.

Presidential candidate Alberto Fernandez had recently inflicted a serious defeat on incumbent Macri in the nationwide primaries in Argentina. The primaries are considered an important mood test for the presidential election in October.

After the election, the stock markets and the peso collapsed. Many investors seem to fear an election victory by Fernandez and his vice-candidate, ex-president Cristina Kirchner. The former head of state stands for a protectionist economic policy.