Argentina losing lustre as debt glut adds to election risks

Washington

THE shine is starting to come off President Mauricio Macri's Argentina.

The country's overseas bonds are among the worst performers in emerging markets over the past three weeks, the peso keeps hitting record lows and foreign exchange volatility led one of its biggest energy companies to scrap a debt sale. Perhaps most embarrassingly, the nation lost out on its bid to regain emerging market status last month, leaving it stuck at the "frontier" level with the likes of Mauritius, Sri Lanka and Kazakhstan.

It was not supposed to be this way. A darling of emerging market investors since he came to power in December 2015 promising to ignite the economy, subdue inflation and roll back regulations that impeded businesses, Mr Macri is now struggling to make good on those pledges after a run-up in asset prices. To make matters worse, a new threat looms:…