Latest news with #Javier Milei
Reuters
3 days ago
- Business
- Reuters
Argentina economic recovery to moderate in the run-up to October vote : Reuters poll
July 28 (Reuters) - Argentina's ongoing economic recovery will moderate to a normal pace in the run-up to October's mid-term legislative election, a Reuters poll showed. At the start of 2025, Latin America's No. 3 economy behind Brazil and Mexico picked up strongly following a two-year recession that capped more than a decade of poor performance. Consumption got a boost from a drastic fall in inflation thanks to President Javier Milei government's "chainsaw" drive that shored up fiscal results, while facing intense social criticism. But Argentines are cutting some spending and investment plans amid a slackening labor market, resurging currency worries and tighter credit conditions. Gross domestic product (GDP) is set to expand at a still-decent 3.4% rate in 2026 from an expected 5.0% this year, according to the median estimate of 28 analysts polled between July 21-25. Inflation is forecast to fall to 23% in 2026 from a projected 42% this year. In 2024, consumer prices shot up 237%, the worst since 1991 when Argentina was experiencing a similar economic shock. "Growth stagnated in recent months as a result of flattening real wages, increased uncertainty and the slowdown in credit from a restrictive monetary policy," said Federico Filippini, head of research at Adcap. "Next year's forecasts are heavily influenced by the upcoming election and the government's ability to advance its reform agenda." Economic activity missed analyst calls in May on yearly terms and virtually stalled against April's levels, the latest data from a leading indicator showed. Businesses are feeling the pinch of high interest rates from the adoption of a market-based money supply scheme in line with a $20 billion International Monetary Fund (IMF) program signed in April. The implementation of the new framework also impacted local assets shaken by foreign exchange tensions caused by a drying up of U.S. dollar inflows from agricultural exports. "Volatility will continue, but less than in recent weeks, with interest rates moving more freely and agricultural exports remaining low until year-end," said Fausto Spotorno, economist at Orlando Ferreres. An expected $2 billion IMF disbursement should contribute to calm market anxiety before October's vote by bolstering Argentina's depleted international reserves. Unable to tap global debt markets due to the country's steep risk premium, the government has received some additional relief through special bond sales as well as bank "repo" deals. However, surging imports from Milei's economic opening keep the central bank's balance sheet under pressure, despite an increase in energy and mining exports. To address the issue, many Peronists campaigning for the October election want to return to a policy mix of devaluation, protectionism and industrial promotion. Voters rejected this approach at the ballot box in 2023, when Milei's La Libertad Avanza party won a presidential election vowing to trim the size of the state. Now his LLA has an advantage in polls over the Peronists, whose internal rivalries flared up after their leader Cristina Fernandez de Kirchner was put under house arrest for corruption. Investors hope Milei will push the "libertarian" agenda aggressively if his party wins more seats in Congress, recreating Argentina's economic transformation of the 1990s. "We may see a re-discussion of reforms that were attempted during the current legislature but failed... for example, comprehensive labor and tax reforms, potentially also a pensions reform," Citi analysts wrote in a report. "The new Congress could also give impulse to privatizations of some state companies that may require only a simple majority – Banco Nacion, (water utility) AySA and Aerolineas Argentinas." (Other stories from the Reuters global economic poll)
Bloomberg
24-07-2025
- Politics
- Bloomberg
Milei's Inner Circle See Cracks Emerge Over Ruling Party Hopefuls
The influential sister of Argentine President Javier Milei is trying to quash dissent within the ruling party that threatens to complicate the libertarian leader's prospects in a pair of crucial upcoming elections. Karina Milei, one of her brother's most trusted confidants, weighed in Wednesday with a rare public statement seeking to impose party discipline after some supporters of the president chafed at the list of local candidates for the province of Buenos Aires ahead of an election there in September.
Times
23-07-2025
- Business
- Times
Badenoch says she would copy drastic cuts of Argentina's president
Kemi Badenoch has signalled that she wants to use Argentina's state-cutting president as the template to revive Britain's economy and her own party's fortunes. The Conservative leader said that her plans to reduce government spending would take inspiration from Javier Milei, adding that she was 'terrified' by the size of Britain's debt. Badenoch also batted away speculation that she may not survive in post until the next general election, saying that if she paid attention to briefings by some Tory MPs about her being deposed, she would 'lose her mind'. It came after a mini-reshuffle of the Conservative frontbench, in which Badenoch brought back her former rival in the leadership contest, Sir James Cleverly, to shadow the housing secretary, Angela Rayner. Badenoch was asked on Thursday if Britain needed a Milei, whom she has previously paid tribute to, and whether she was such a leader. 'Yes and yes,' she told the Financial Times in an interview. 'Milei is the template.' • Javier Milei's chainsaw economics in Argentina could lead the way Milei has overseen massive spending cuts since he came to power, just over a year and a half ago. His trademark prop is a chainsaw, to demonstrate his approach to public spending. Measures implemented in Argentina under his leadership include dismissing tens of thousands of state employees, slashing pensions and freezing dozens of infrastructure projects. The tribute to Milei this week will lead to speculation that Badenoch will push for significant spending cuts — however, where these would fall remains unclear. She said: 'It's not about cutting bits of the state.' Badenoch warned against 'top slicing' spending, and said instead: 'It's about looking at what the state does, why it does it.' Despite the Tories having trailed in the opinion polls for months, Badenoch warned her party not to emulate Nigel Farage's party. She said: 'We cannot be a repository for disenchantment,' instead saying the Tories should be about 'offering hope, fixing problems'. • What Kemi Badenoch's reshuffle says about the state of the Tories Badenoch praised Milei in her leadership pitch to Tory members at the party conference last autumn, saying that he gave a speech with 'very similar themes' to one she delivered two years ago, and hoped to have been his source of inspiration. In January, Badenoch also said that Argentina was 'serious about freeing business from red tape'. At prime minister's questions at the start of the year, she said 'Argentina is taking a chainsaw to regulations', in an attempt to persuade Sir Keir Starmer to drop his plans to strengthen workers' rights that she argued would stifle business growth.
Yahoo
17-07-2025
- Business
- Yahoo
Milei Wins Second Upgrade by Moody's on Easing FX Controls
(Bloomberg) -- Argentina's credit rating was upgraded by Moody's Ratings for a second time this year, with the agency citing the easing of currency controls and support from the International Monetary Fund. The Dutch Intersection Is Coming to Save Your Life Advocates Fear US Agents Are Using 'Wellness Checks' on Children as a Prelude to Arrests LA Homelessness Drops for Second Year Manhattan, Chicago Murder Rates Drop in 2025, Officials Say Moody's raised the country's credit score by two notches, to Caa1 from Caa3, on par with Egypt and Suriname, according to a statement on Thursday. The nation's outlook was changed to stable from positive. The upgrade comes amid President Javier Milei's attempts to transform South America's second-largest economy. Strategists and analysts alike have lauded the libertarian's efforts to tamp down rampant inflation and reverse years of endemic budget deficits. 'The upgrade reflects the decrease in the risk of a credit event, as the gradual lifting of foreign exchange restrictions enables a transition toward a more robust foreign exchange regime anchored on building international reserve buffers,' Moody's said in a note. Milei's policies have brought price increases to less than 2% a month, with annual inflation now at its lowest since 2020. He's also put the country on track for a primary surplus in 2025, the first in over 15 years, easing the debt burden. The economy returned to growth this year, expanding 7.7% in April, more than expected. But Wall Street has cautioned that despite a new IMF program and more liberal exchange regime, Milei and his team need to amass more hard-currency reserves, something that authorities have pledged they won't do until the peso trades at around a level of 1,000 per dollar. It is currently above 1,200. Another chief concern is whether Milei manages to expand his legislative support during midterm elections later this year. The vote is a key test of support for the administration's harsh belt-tightening campaign. Argentina's dollar bonds underperformed their peers on Thursday before the upgrade was announced, with notes maturing in 2035 losing 0.6 cents on the dollar to trade at around 64 cents, according to indicative pricing data compiled by Bloomberg. The notes now yield 11.94%. Moody's Ratings lifted Argentina's credit score one notch to Caa3 in January, and raised the outlook to positive from stable. Fitch Ratings then raised the nation to CCC+ from CCC in May. S&P Global Ratings affirmed its CCC rating in early February. --With assistance from Nicolle Yapur. (Updates with inflation figures in the fifth paragraph, bond prices in the eighth) How Starbucks' CEO Plans to Tame the Rush-Hour Free-for-All What the Tough Job Market for New College Grads Says About the Economy Forget DOGE. Musk Is Suddenly All In on AI The Quest for a Hangover-Free Buzz How Hims Became the King of Knockoff Weight-Loss Drugs ©2025 Bloomberg L.P.
National Post
17-07-2025
- Business
- National Post
J.D. Tuccille: The remarkable triumph of Javier Milei
It's possible that no politician has defied the expectations of the chattering class as successfully as has Argentina's libertarian President Javier Milei. Expected to remain in political obscurity, he rose to lead a political movement. Anticipated to lose a presidential election to a candidate from the country's dominant authoritarian political party, he won. And predicted by a cabal of academic economists to lead Argentina to ruin with free-market policies, he instead turned around the long-suffering country, resulting in lower inflation and rapid economic growth. Article content Article content Argentines have decades of experience with making bad choices and suffering their consequences, but this time they may have broken that unfortunate pattern by electing leadership that wants the state to take a back seat to individuals and private effort. Article content Article content Article content Drawing on official data, Reuters reports that Argentina's 'economic activity rose 7.7 per cent in April compared with the same month last year.' That was higher than expected and a welcome addition to news that the economy had grown by 5.8 per cent during the full first quarter relative to the same quarter the previous year. Early numbers put Argentina's second-quarter growth at 7.6 per cent. By contrast, Canada's economy grew at an annual 2.2 percent in the first quarter and the U.S. economy shrank a bit. In equally encouraging news, Argentina's 'monthly inflation rate has fallen below two per cent for the first time in five years,' according to the Financial Times. That's still high in North American terms, but Argentina's governments have a history of wildly expanding the money supply to pay off debt and finance expenditures, resulting in inflation rates in the hundreds and even thousands per cent per year. Inflation slowed somewhat in recent years, but it was over 200 per cent in 2023 and Milei was elected on a promise to stabilize prices — even if it meant adopting the U.S. dollar as the country's official currency. Article content Article content Importantly, the poverty rate in Argentina has also fallen to 38.1 per cent of the population at the end of 2024 from 41.7 per cent when Milei took office. Again, that remains very high, but it's an improvement in a country where politicians have long seemed committed to keeping people poor and dependent on the state. Article content Article content This wasn't supposed to happen. In a November 2023 open letter, over 100 economists warned that Milei's economic 'proposals, rooted in the economy of laissez-faire and which include controversial ideas such as dollarization and significant reductions in public spending, are fraught with risks that make them potentially very harmful to the Argentine economy and people.' Article content The economists — including such academic luminaries as Thomas Piketty and Jayati Ghosh — warned of havoc if Milei implemented his free-market plans. Voters weren't impressed by the forecast of doom; they chose the self-described 'anarcho-capitalist' economist and his upstart political coalition over the standard-bearer of the dominant Justicialist Party.
