On Tuesday, the United States Chamber of Commerce in Argentina (AmCham Argentina) held a summit in Buenos Aires, bringing together politicians and prominent business leaders. In her opening speech, María Schoua stated that agriculture “accounts for more than half of Argentina’s exports,” emphasized the country’s potential to become a global energy “supplier,” and noted that mining “could triple exports.” However, according to accounts from attendees at the event reported, certain sectors are lagging — and Argentina’s economy, under Javier Milei, exhibits distinct winners and losers. A representative for a mining company, who spoke under the condition of anonymity, conveyed that he considered Economy Minister Luis Caputo’s speech to be “correct” and “aligned with reality.” The individual responsible for naming 2024’s Large Investment Incentive Regime (RIGI, by its Spanish initials) and for the recently enacted reform that relaxes protections on glaciers represents key elements that may enhance economic growth and draw in investors. However, not all individuals shared the same level of enthusiasm. A senior executive from a prominent food manufacturing firm, speaking on the condition of anonymity, indicated that the company is just managing to break even, operating on a month-to-month basis without any annual planning in place. The businessperson noted that, although sales of premium products are increasing, the consumption of foodstuffs by mainstream sectors is declining. “The dual Argentina,” he remarked.
Fixed costs are increasing; however, due to a decline in consumption, companies are refraining from transferring these costs to prices. The strategy entails “selling more and gaining market share.” He added “If you don’t launch new products all the time, no matter how good you are —even if you have the Coca-Cola formula—you won’t sell.” The executive indicated that the food manufacturing sector is pressing the government to “reform the tax system,” which has largely remained unchanged. In addition to firms currently operating in Argentina, several entities contemplating investment in the nation participated in the event. For instance, representatives from Grupo México, a Mexican train and mining enterprise, are considering Belgrano Cargas — a recently privatized Argentine entity that manages freight trains across three lines: Belgrano, San Martín, and Urquiza. President Javier Milei presided over the conclusion of the summit. The speech was delivered in subdued lighting, devoid of any visual projections of the speaker on large screens, while journalists were restricted to a cramped area without seating in the back row.
Scattered applause, predominantly emanating from the front row, punctuated his jokes and yells. He commenced by stating his intention to elucidate the increase in the inflation rate, as reported by the official statistics institute on that day. In March, prices experienced an increase of 3.4%, marking the highest monthly figure observed in a year. He stated that the increase in prices was a consequence of a run on the peso, attributed to his opposition in Congress enacting “more than 40 laws aimed at disrupting the fiscal balance” last year, which he regarded as a “coup d’etat attempt.” A representative from the energy sector characterized Milei’s speech as “good,” whereas a senior executive from a business network described it as “delirious.” Martín Kalos remarked that the speech “had all of his usual elements, but tried to dress itself up as academic to justify what’s happening with inflation.”
Milei also indicated that seasonal factors such as education, meat, and energy prices influenced the rate. Kalos argued that this explanation is overly extended, particularly given that inflation has been on an upward trajectory for approximately 10 consecutive months, beginning in May, which stands in contrast to the government’s narrative. The president’s prior achievement in reducing inflation was attributed to two key “anchors”: a relatively stable exchange rate and declining real wages. As those conditions shifted—wages rebounding and the peso depreciating—inflationary pressures reemerged. Kalos cautioned that attempting to utilize the exchange rate as an anchor is unsustainable if market participants do not perceive it as indicative of a genuine equilibrium. “Deep down, he’s avoiding saying what’s really going on — that the disinflation process is in pause,” he stated.