Argentina - Milei at 100 days
Milei likely faces at least one round of a bust-boom-bust cycle in the coming years
President Javier Milei made it to day 100 of his term. Here are the Economist, Al Jazeera and El Pais on the situation in the country.
Quick summary:
Poverty and inflation are up, which has many citizens angry.
Various economic statistics like the government's fiscal surplus and the spread between the official and unofficial currency rates look surprisingly good. Those stats are great news if you are an IMF analyst. As a general rule, Argentines hate IMF analysts.
Milei is clashing with the Congress. He is governing based on his decree power and even that is limited by the other branches of government.
With that in mind, a few comments about the months ahead:
Milei remains above 50% approval today, but that number will likely drop in the coming three months with the honeymoon over and the country feeling the economic pain.
Yes, there will be protests in the coming months. No, those protests should not represent a threat to Milei's presidency. Milei is going to face typical Argentina protests that every president faces.
This could still turn out ok for Milei and Argentina's economy by the end of the year. While progress is slow, many of the positive variables I wrote about in December remain true today. While I still think Milei leaves the country worse off over the long term, he may very well get some good economic times after the initial pain.
One wildcard may be the weather. Good agriculture will bring in more tax revenues over the next two years, but drought or a major natural disaster at the wrong time will stifle Milei's agenda. The other wildcard will be demand from China, which will impact global commodity markets.
Dollarization is still on the table, but it will come in phases. The president has already started the next step of pushing competitive currencies in which dollar (or Euro, Real or Bitcoin!) transactions are more normalized in the country even as the peso continues to exist. It's not going to be an overnight dollarization, but Milei is going to push the boundaries on the currencies used in the country away from the peso.