LONDON (Reuters) - A potential upgrade for Argentina to emerging market status from index provider MSCI could see nearly $1 billion in investor money pour into the country's stocks, JPMorgan said on Tuesday.

MSCI classifies Argentina as a Standalone Market rather than as part of its widely followed suite of emerging market indexes. The index provider relegated Argentina in November 2021 amid market accessibility issues, including tough capital controls that limited investors' ability to replicate the index.

Argentina's government under President Javier Milei has been on a major reform push and has pledged to move into "phase two" of its plan to stabilise the crisis-hit economy, with inflation in triple digits, a deepening recession, and myriad capital controls that skew trade but are in place to shield the peso.

If Argentina were to rejoin the MSCI EM indexes, JPMorgan predicted four firms would be part of the MSCI Argentina Standard Index - YPF, Grupo Financiero Galicia, Banco Macro and Pampa Energia, while the MSCI Argentina Small Cap Index would have eleven constituents.

"With an estimated weight of 0.2% in EM, Argentina would stand between Colombia and Peru in the EM Index," said JPMorgan's Diego Celedon.

If a reclassification materializes, JPMorgan estimates potential inflows could reach nearly $1 billion, including $786 million from the Standard Index and $176 million from the Small Cap Index.

Argentine Economy Minister Luis Caputo and central bank chief Santiago Bausili told the country's banks in a meeting last month that capital controls would be lifted, but "without any rush", according to a source.

JPMorgan expected curbs to be eased once macroeconomic conditions were stabilizing and FX reserve ratios improving, adding it expected to see that starting to materialise in the fourth quarter.

MSCI usually announces any changes to its country classification during its Market Classification Review which tends to be scheduled for June and generally follow a consultation process with investors.