Argentina’s issue is not a deficiency in growth potential but rather a deficiency in stability, stated BlackRock executive Pablo Goldberg during his address to business leaders at the IDEA Colloquium in Mar del Plata on Thursday. In a conversation with IDEA treasurer and Grupo Cohen managing partner Ana Cohen, Goldberg encapsulated the prevailing sentiment in a single phrase. “Until Argentina manages to lower its volatility, it will remain a ‘trade,’” he stated, alluding to the term used for investments characterised by high risk and high reward. Goldberg has been observing Argentina’s economy from a distance for a quarter of a century. In response to the inquiry about Argentina’s classification as a short-term bet versus a long-term destination, he highlighted its historical performance. Until that changes, he stated, international capital will regard the country as an opportunity for entry and exit, rather than as a destination for long-term investment.
During his presentation, Goldberg illustrated Argentina’s case by employing the Sharpe ratio, a financial metric that assesses return relative to risk exposure. When applied to nations, this metric calculates growth relative to the volatility experienced by the country. Goldberg initially introduced the exercise in 2011, with the then-President Cristina Fernández de Kirchner seated in the front row. At that time, Argentina was positioned uniquely with the most unfavourable risk-return ratio among 60 countries. His updated version in 2026 indicates that the country’s position has “only deteriorated.” Following a series of defaults, Argentina positions itself as one of the poorest long-term performers within emerging market bond indices. “That history stays in the memory,” he stated. Goldberg subsequently utilised Moody’s analysis of Argentina’s rating, juxtaposing it with nations that hold an equivalent grade: Nigeria, El Salvador, and Ecuador. Based on current economic, institutional, and fiscal strength alone, Argentina would qualify for investment grade. Its historical performance, however, is a constraint on its progress. “The past condemns you in some way,” Goldberg added.
High domestic political risk also contributes to this situation, along with the absence of a robust local capital market. This compels the state to incur foreign debt and settle obligations in U.S. dollars, all the while collecting taxes in pesos. Goldber was also enquired about the number of political cycles required for investors to regain trust in Argentina, to which he provided a criterion instead of a specific figure. “If locals don’t trust it, why should I?” he asked. In cycle after cycle, he stated that Argentines seek refuge in U.S. dollars ahead of elections. If locals seek refuge, so too will foreigners. In his perspective, credibility hinges on the adherence to established rules as well as the consistent actions that demonstrate their respect over time, which encompasses the provision of reliable official statistics. He referenced the lawsuit concerning Argentina’s GDP-linked warrants, a case directly related to the methodology of growth measurement. The BlackRock executive emphasised a notable cultural shift: an increasing agreement that substantial fiscal deficits cannot be sustained through the mechanism of money printing. The primary factor that companies consider is “the postal code,” Goldberg informed Cohen.
Country risk serves as a limiting factor on the perceived creditworthiness. Investors subsequently seek hard-currency revenue, or at a minimum, access to dollars for coupon payments, alongside a stable framework. “The best thing that can happen to us is to buy a bond and forget about it,” he said. The competition for that capital is intense. With global rates rising amid tech giants absorbing enormous financing resources to build their AI infrastructure, Goldberg noted that Argentina is currently competing against Meta, Google, and Amazon. Goldberg stated that achieving investment grade would be “highly important.” Investment-grade countries exhibit yields that are less than 200 basis points above U.S. Treasury bonds, in stark contrast to the approximately 600 basis points associated with Argentina. Due to the pronounced slope of the curve connecting ratings and country risk at the lower end, even minor enhancements lead to a significant decrease in financing costs for both the state and corporations. According to his own partial estimate, Argentina’s representation in bond indexes would nearly double. Improvements in the current account, propelled by the energy, mining, and agriculture sectors, are beneficial. However, he emphasised the importance of reconstructing a robust domestic capital market.
In a notable shift from the Tequila crisis-era assertion that Argentina was distinct from Mexico, he expressed a desire for Argentina to emulate Mexico, particularly in terms of achieving investment grade status and enhancing market depth. The models he referenced are Peru, which has navigated through successive political crises while maintaining macroeconomic stability, and Uruguay, where governmental transitions occur but certain fundamental rules remain indisputable. “Reduce the volatility of output and not recklessly encourage growth,” was his advice. In response to Cohen’s inquiry regarding the level of interest in Argentina among his colleagues, Goldberg affirmed positively. Given the global demand for energy, coupled with a preference for low geopolitical risk and stability, Argentina finds itself in a favourable position to provide these attributes. “I do think it has to work on the last one,” he said.
