Argentina and Spain face economic stabilization and growth challenges

Argentina's economic stabilization remains incomplete despite reducing extreme risks such as hyperinflation and debt restructuring. Carlos Pérez, former Central Bank director, noted that while fiscal order and monetary prudence have improved, the economy is still in a fragile state, comparing it to a patient who has left intensive care but has not yet been discharged. Key challenges include strengthening central bank reserves and stimulating economic activity ahead of 2027. While the Central Bank recovered significant reserves in early 2026, the pace of accumulation slowed in late 2025 and 2026, impacting the country's risk premium.

In Spain, economic forecasts indicate a progressive slowdown, with growth expected to drop from 2.5% this year to 1.7% by 2028. Analysts from Funcas point to high inflation, rising interest rates, and a growing public deficit as primary headwinds. Furthermore, Spain's growth has relied heavily on labor increases through immigration rather than productivity gains. The ICER reports that labor productivity in Spain has grown by only 0.6% annually over the last three decades, highlighting a structural dependence on increasing total hours worked rather than efficiency improvements.