Whisper it quietly, but Argentina’s embattled markets are showing signs of doubling down on the country’s no holds barred libertarian leader Javier Milei, betting he can pull the economy out of crisis.
Amid a painful economic downturn and with the government strapped for cash, Milei has made tough austerity a key focus since taking office in December, helping the country post its first monthly fiscal surplus for over a decade in January, music to the ears of investors after years of over-spending.
That hasn’t helped him make many friends with squeezed regional governors or unions – leading to a spike in protests – but has charmed investors, pushing some bonds to four-year highs and cutting Argentina’s risk index to a low since 2022.
“It seems the market is starting to believe,” said financial analyst Mariano Sardans at FDI Argentina, adding if it could be maintained it would strengthen the embattled peso, allowing tough currency controls limiting dollar access to be unwound.
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Milei, who made the bold pledge of erasing a nearly 3% fiscal deficit from last year, has sought to make good on his word. His government has slashed spending, bought over $5 billion in dollars to build up depleted reserves and rolled over import debts with a successful issuance of ‘Bopreal’ bonds.
For now that’s bolstering market belief that Milei will follow through on his pledges to stabilize the economy, no easy task with studies suggesting poverty has risen towards 60% and with increasing protests on the streets.
Continue here: Reuters
