A reasonable financial program. The economic team presented the financial program, something not seen since the Dujovne era, taking a positive step toward gaining predictability over next year’s maturities and clearing uncertainty ahead of an election year. Broadly speaking, we find it reasonable and quite in line with our numbers: the Government plans to issue at least USD 5 billion in the local market and add another USD 2 billion from other loans, on top of the USD 3.7 billion in overfinancing that will carry over from this year. In addition, the Treasury will have to purchase around USD 5 billion from the BCRA to cover the gap. These are achievable goals, but not without risks, considering it will be an election year with portfolio dollarization, which could complicate both the BCRA’s effort to accumulate reserves and the Treasury’s ability to issue debt. For more detail, see the note below.

When the Government unexpectedly swept last year’s midterm elections, it seemed that in 2026 it would take the world by storm. The wave of optimism suggested it would consolidate its popularity, advance forcefully in Congress, and — with the “kuka” (left-populist) risk cleared — that the arrival of investment would accelerate. On the economic front, the program was expected to start showing more decisive results in activity and disinflation once the electoral shock had passed. Six months later, the balance is more mixed. There were important achievements, some stumbles, and a political agenda that got more complicated than expected.

There’s no doubt that the wind has shifted in the foreign exchange market. The exchange rate rose almost 5% in June, breaking a stability that had lasted more than five months. It’s not a worrying increase, but it clearly shows that the second half of the year will be more challenging on this front. It is also the first real test the Government has faced since the reserve accumulation program began and since monetary policy adopted an expansionary bias.