Newspaper Report:
Argentine International Political Economy
International Relations
POLS 1160
Student:
Santiago Del Moral
Candidate for B.S. in Philosophy, Politics and Economics
November, 2024
Argentina’s foreign risk is trending downwards1. While still at high levels, higher than regional
neighbors Brazil and Mexico, it is 52% lower than last August, driven by many macroeconomic factors
developing under President Javier Milei’s administration. Economic Minister Luis Caputo has
mentioned plans to liberalize capital controls in the country this coming January 2025, under the
expectation that there will be a greater influx of dollars than capital flight, due to the developing
business friendly environment2. This greater increase of dollars, also fueled by the government’s
successful program to legalize undeclared dollars for a fee, will allow the January 2025 bond
obligations to be paid in full without negotiation3 and, with a sufficient government surplus in the
expected 2025 5% GDP expansion, could even allow for the government to reduce taxes, mentioned
the Caputo.
These developments are of great importance for Javier Milei’s successful management of the
Argentine economy. The improvement of the mentioned economic indicators, and the policy decisions
that follow it, signal that this is just the beginning of Argentina’s economic recovery. In a much better
position, it will be far easier for Argentina to re-enter the global debt markets in favorable terms, and to
potentially achieve the goal of Dollarization, as the official and black market dollar begin to converge4.
Furthermore, the economic headwinds are sure to bring about an increase in foreign direct investment
in the country, as part of a “virtuous circle”5.
It is clear that Argentina’s fiscal and monetary policy is beginning to yield dividends. Despite
Milei having declared the recession “over”6Analysts argue that while almost all sectors have seen no
deterioration since the second quarter, the recovery will be heterogeneous and slow without an increase
1
Pedotti, 2024
2
El Observador. 2024
3
Infobae. 2024
4
Seifert 2024
5
Gismondi 2024
6
Escobar 2024
in wages or employment to offset this year’s losses. Milei’s efforts of combating inflation, foreign risk,
government spending and debt default have proven successful so far, but not without costs. It is
without a doubt that if 2024 was defined by Milei’s “Chainsaw” to the economy, he intends for 2025 to
be all about economic recovery, expansion and liberalization. Only time will tell how successful
Argentina’s policies will be during Milei’s second year in 2025.
Bibliography:
1. Pedotti, Ana Clara. 2024. “El Riesgo País, En Baja: Cuánto Falta Para Que Argentina Pueda
Pensar En Volver a Los Mercados.” Clarín, November 25, 2024.
[Link]
pensar-volver-mercados_0_UtHLwl06Gg.html?srsltid=AfmBOorgJS6Itpha9CzeliZYktprGeQt
AxA--loI8yFPhOJFfqAfIG69.
2. El Observador. 2024. “Luis Caputo Anticipa La Salida Del Cepo Y Plantea Baja De Impuestos
En Argentina: Un Llamado a La Confianza Empresarial.” El Observador, November 12, 2024.
[Link]
-del-cepo-y-plantea-baja-impuestos-argentina-un-llamado-la-confianza-empresarial-n5969814.
3. Infobae. 2024. “Caputo Negó Que Busque Un Canje De Deuda Y Reafirmó Cómo Van a Pagar
Los Vencimientos De Enero.” Infobae, November 25, 2024.
[Link]
reafirmo-como-van-a-pagar-los-vencimientos-de-enero/.
4. Seifert, Daniel. 2024. “Luis Caputo Prometió Que ‘El Dólar Tarjeta Va a Bajar’ Y Sostuvo
Que El Cepo Se Termina ‘En El 2025, Sin Duda.’” Clarín, November 22, 2024.
[Link]
mina-2025-duda_0_R3sykECuDs.html?srsltid=AfmBOooz0jBhJ5qTbsbB0SrmIzwMHdyq-8tg
DJX6EU8BxrYGDDW2VQuH.
5. Gismondi, Milagros 2024. “Círculo Virtuoso, ¿Hasta Cuándo? - Cohen Perspectivas.” Cohen
S.A. November 2024.
[Link]
6. Escobar, Belén. 2024. “Milei Da Por Terminada La Recesión En Argentina: Qué Desafíos
Ven Los Economistas.” Bloomberg Línea, November 11, 2024.
[Link]
sion-en-argentina-que-desafios-ven-los-economistas/.
