Milei's chainsaw stalls: Will Argentina's economic miracle' turn into a nightmare?

"Everyone sees it, except the Argentines, he immediately lamented, aware of his audience's skepticism, since they were cautious about committing their investments. The far-right leader had been president of Argentina for eight months and boasted of having launched the largest fiscal adjustment in the history of humanity. Those were times of euphoria and hyperbolic statements: at that point, the country had achieved a fiscal surplus, inflation had fallen from 20% monthly in January to under 5% in June, the economy was projected to grow nearly 4% in the third quarter after a 1.8% decline in the first and household consumption was soaring, supported by the return of credit and a cheap dollar."

"But help could be on the way: following Milei's trip to New York for the United Nations General Assembly, U.S. Treasury Secretary Scott Bessent announced on Wednesday that the White House was negotiating a $20 billion currency swap to strengthen the Central Bank's reserves, the purchase of Argentine debt bonds, and a significant stand-by credit via the Exchange Stabilization Fund, the amount of which was not specified."

"Argentina's country risk fell from just over 1,000 points at Tuesday's close to 839 points at the opening, a drop of almost 18%. It's still far from the 500 points of a year ago, but it represents a notable improvement over the 1,500 points it reached the previous week."

Javier Milei presided over strong initial macroeconomic signals, claiming a fiscal surplus, sharply lower inflation, a rebound in consumption, and faster projected growth after implementing aggressive fiscal adjustment. Momentum later weakened and the so-called miracle began to falter within a year. Following Milei's trip to New York, U.S. officials signaled negotiations for sizable support including a $20 billion currency swap, purchases of Argentine bonds, and a possible Exchange Stabilization Fund standby credit. Those moves coincided with a meaningful fall in Argentina's country risk, from over 1,000 points to 839, improving from a recent peak near 1,500 points.

Read at english.elpais.com