EM LATAM CREDIT: Argentina Primary Budget Surplus - Neutral

(Caa3pos/CCC/CCC+)

"*ARGENTINA MAY PRIMARY BUDGET SURPLUS ARS1.697T" - Bbg

As part of the USD20bn IMF agreement April 2025, the government committed to a certain level of primary surplus so we are watching this data carefully.

April's surplus was ARS846bn. Cumulatively for 2025 YTD the primary budget surplus was ARS6.9tn which was about 1% of GDP. The IMF targets 1.25% of GDP for 2025 and growing to 2.5% in 2026.

There is intense pressure on the government to spend from many different directions such as opposition party proposals to increase pension benefits.

So far the government has done an impressive job of keeping a lid on spending despite an increasing number of government worker strikes protesting for wage increases.

The other major commitment to the IMF was for the building of reserves and we note that the central bank has maintained now a balance over USD40bn for a few days now, last at USD40.37bn which was up from USD38.6 on June 12th.

ARGENT 2035s were last quoted USD65.84, up 3 points QTD and down about a point ytd.