New challenges in the second phase of the program
There is increasing evidence that after an initial period in which the government was very successful in getting the economy out of intensive care, the program is now entering a new phase, which involves trade-offs, more fine tuning in the design of policy, and in which it will be more difficult to show impressive results.
The new political and economical outlook after the IMF agreement
The political and economic climate has markedly improved since Argentina signed the new agreement with the IMF. On the political front, the government scored a key victory in the legislative elections of the City of Buenos Aires, which was a local election with strong implications at the national level. What would normally have been a […]
Will the new Extended Fund Facility work?
The negotiations with the IMF took longer than most people anticipated. Argentina wanted a USD 25 billion program while the IMF probably had in mind half of that amount. There were also discussions about the size of the upfront disbursement, as Argentina was requesting more dollars than the IMF was willing to provide. At the […]
A Tag of War Between Argentina and the IMF
The government is losing momentum, and it now appears unlikely to have a smooth path to the October elections. After a first year in which everything went according to plan on the economic and political fronts, the outlook is gloomier due to some unforced errors and deteriorating financial conditions.
Some hurdles on the way to the election: From Libra to higher country risk
Until now Milei’s image appeared to be bulletproof. Though recently, some of his statements generated criticisms that affected his image. It all started with an unfortunate dissertation in Davos, where he was aggressive with minorities. However, the biggest controversy came from a tweet in which he promoted the token Libra. The price of Libra skyrocketed […]
What to Watch in 2025 on the Way to the Elections
The international environment is changing rapidly and does not seem to bring the tail wind that Argentina needs. At first glance Trump appears to be good news. This is clearly the case when it comes to providing support in the negotiations with the IMF, as he did with Macri. A call from the White House […]
From the Year of Living Dangerously to Milei in Wonderland
2024 started as “the year of living dangerously” and ended as “Milei in Wonderland”. Of course, we are not in wonderland yet, but the year is ending on a high note and much better than almost anybody would have imagined.
The October financial rally: temporary upswing or turning point?
Just a few months ago the concern was that the parallel exchange rates were again skyrocketing and that the country risk was returning to astronomical levels. Something happened along the way and in the last weeks we have seen a tremendous rally in stocks and bonds, the exchange rate has stabilized, and the spread dropped […]
“Adjustment fatigue” is beginning to set in
The government confronts a more difficult political climate. However, it benefits from the fact that no one in the opposition is able to capitalize the moment yet. The index of confidence in the government dropped 15% in the September measure, while the index of consumer confidence fell 5.9%. Another bad news is that 52.9% of […]
Milei had a tough month in Congress, but public support remains high
President Milei has had a terrible political couple of weeks in Congress. The Senate voted with an overwhelming majority to change the formula to adjust pensions. This would cost money this year and next, although through a good ruling it may not be too bad. Milei promised a veto but given that the bill passes […]