Argentina risk premium drops after debt payment as industrial output contracts

Argentina's sovereign risk indicator fell to around 400 basis points after the government made the first installment of a $4.3 billion debt payment, releasing roughly $2.5 billion. The risk premium slid 0.7% in one session, reaching its lowest level since 2018 and approaching a historic low of 400 points. The move followed the presentation of the 2026‑2027 financial plan and came on a market‑closed day for the Buenos Aires stock exchange due to the Independence holiday.

In May, Argentina's industrial production index registered a 0.3% year‑on‑year decline and a 2.3% contraction over the first five months of 2026. The modest monthly rebound was driven chiefly by a 19.4% rise in petroleum refining and growth in basic chemicals, while sectors such as consumer goods, machinery, automotive manufacturing and agro‑chemicals posted sharp falls. The data highlights a split recovery, with energy and basic inputs supporting output amid broader weakness in domestic‑demand‑driven industries.