Even before the expiration of the Argentina agreement with the International Monetary Fund in December, President Javier Milei began to continue a new rescue plan.
Last month, Milei flew to Mar-A-Lago to meet Donald Trump, hoping that the American president would help him get new funds. A week later, the IMF executive council has a Green a loan of $ 20 billion.
The same day, Milei addressed the nation on television: “Today, we break the cycle of disillusionment and disenchantment and start to move forward for the first time.”
Since its first rescue package in 1958, Argentina has been a recipient of more IMF programs than any other country: a record of 23 transmits to $ 177 billion in loans. However, due to the conditions of the loans themselves, incoherent policies, chronic inflationary pressures and the lack of significant structural reforms, they did not do much to stimulate the economy.
This time, things could be different. The aggressive measures of Milei last year led to a rare budgetary surplus, reduced inflation and increased growth and employment. The new loan can help Argentina launch its economy further.
Then there is Trump.
Milei’s deference to the American president has often been ridiculed, notes Juan Pablo Ferrero, principal speaker in the Department of Politics, Languages and International Studies at the University of Bath in the United Kingdom: “He was a solid supporter of Trump even before the various economic belief systems, but the gamble was skeptical.”
Milei’s unconditional alignment with the United States, says Ferrero, has given enormous advantages: “The agreement with the IMF and a recent statement from the US government that the Treasury could grant a loan in the event of an external shock shows an extraordinary level of support for Milei.”
All of the above, argues Ferrero, allowed Milei to remove certain capital controls and give a feeling of stabilization to the economy.
However, the history of the two presidents differs on the prices. While Trump raised them, the libertarian Milei made them go back, triggering an unprecedented import boom and attracting investments. However, the Peso has strengthened, making Argentina very expensive and striking the hardest middle class, adds Ferrero.
“The mid-term elections are approaching later this year,” he notes. “Milei hopes that the discreet charm of normality will do its job and persuade voters.”