Inflation vs. Stagnation: Argentina’s Policy Dilemma
The government is facing a rapid deterioration in the political and social climate, just four months after the impressive electoral victory of last October. This has been particularly surprising because it is happening after having passed in Congress the long-awaited labor reform, which was expected to give a boost to the credibility of the program. […]
Good Outlook, Though Need for Some Mid-Course Corrections
The labor reform shows the determination of the Milei administration to advance structural reforms that can improve the business environment. It also shows that he has achieved a political consolidation in Congress. We expect that this reform will be quickly followed by others, namely the law of glaciers and a tax reform, and by numerous […]
2026, Back to the Markets and consolidation of the program
A turning point? After a year characterized by high economic volatility and political uncertainty, the government has strengthened its political position, supported by greater representation in Congress and continued popular backing. Confidence in the administration has recovered to high levels after suffering a significant decline prior to the October elections. This political consolidation has improved […]
2025 Ends on a High Note, with Cautious Optimism for 2026
The October elections marked a turning point . In 2025, the government consolidated its power after achieving a convincing victory in the midterm elections. LLA, President Milei’s party, now holds the largest minority in the lower house, while the Peronists lost their majority in the Senate for the first time since the return of democracy […]
The economy after Milei’s midterms win
To begin with, La Libertad Avanza increased its representation in both chambers of Congress. In the Lower House it is now the largest bloc, with roughly 90 seats—plus additional support from PRO and other parties aligned with the government. In the Senate its representation also grew, and, most importantly, Peronism will not hold a majority […]
A New Political and Economic Environment
The government’s victory in the mid-term election was a game changer. The LLA got 40% of the national vote and achieved its goal of reaching one-third of Congress in both chambers (enough to sustain possible vetoes to opposition populist initiatives). With its alliance with PRO, it now has 104 Congressmen in the lower House, more […]
Without reserves, there can be unpleasant surprises
The financial turmoil increased after the election in the province of Buenos Aires. The last weeks brought to the forefront the need to rethink the program and shift priorities from reducing inflation to accumulating international reserves.
Monetary Policy and the Exchange Before and After the Elections
We are now in election mode, and the campaign is heating up. The government is under scrutiny about a corruption scandal that involves close advisors to Karina Milei (namely “Lule” Menem). It is also under pressure in Congress as it lost crucial votes that reversed executive orders while Milei’s veto to stop increases in expenditures […]
Politics and lack of reserves put pressure on the exchange rate
The electoral process is starting to affect the overall political and economic climate. Nothing major yet just some mild turbulence, as the opposition begins to take advantage of the situation to negotiate financial resources for the provinces. Congress has been the sounding board for this new dynamic, passing a law to increase pensions and other […]
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.