President Milei’s backing from the Trump administration highlights a significant juxtaposition against the increasing difficulties he faces domestically. The recent approval of Argentina’s new agreement with the International Monetary Fund (IMF) was overshadowed by the release of March’s consumer price index (CPI), which revealed an inflation rate of 3.7 percent. This marks the highest figure recorded in several months under the current La Libertad Avanza administration.
Javier Milei made his entrance at the Casa Rosada at 3:40 PM on Friday, convening a meeting with his Cabinet members to express backing for the agreement poised for ratification by the IMF board. The President had prior knowledge that the inflation figure would be unfavorable. The Casa Rosada and the President expressed their enthusiasm and relief following the board’s ratification of the deal. In the midst of a challenging domestic landscape characterized by escalating inflation and a depletion of foreign currency impacting Central Bank (BCRA) reserves, the administration of Milei has found a measure of relief through its connections with Donald Trump. At home, the landscape is increasingly marked by rising uncertainty on both economic and political fronts.
Trump’s robust endorsement of Milei was evident in the backing and approval of Argentina’s extended fund facility (EFF) agreement. The support in question emerged after the President’s unsuccessful trip to Mar-a-Lago, Trump’s resort and residence in Florida. This situation led to visible irritation from both Milei and his sister, Presidential Chief-of-Staff Karina Milei, who directed their frustrations towards Foreign Minister Gerardo Werthein. The Trump administration is set to make a significant move with the anticipated visit of US Treasury Secretary Scott Bessent, who is slated to arrive in Argentina on Monday. According to government sources, it appears that Bessent took the initiative to convene the meeting. He is acquainted with Economy Minister Luis ‘Toto’ Caputo from the financial sector and is regarded as “a markets man.” In a historic move, the United States Treasury Secretary is set to make the inaugural visit to Argentina.
Officials at the Casa Rosada are optimistic that ongoing discussions may result in a new tariff scheme within the next few months, marking it as a significant agenda item for the upcoming meeting on Monday. Milei and Caputo are set to welcome Bessent at the presidential palace, coinciding with the international turbulence triggered by Trump’s trade conflict with China. A joint statement from the leaders of both economies is anticipated to follow in the press briefing room. Officials at the Casa Rosada are consistently asserting that Argentina and Trump have entered into a strategic partnership.
President Milei’s backing from the Trump administration highlights a significant juxtaposition against the increasing difficulties he faces domestically. In a landscape marked by a barrage of statistics shared by Milei and his team on social media, the Casa Rosada concedes that the economy has not yet experienced a significant rebound. Sources acknowledge that the favorable indicators released by the INDEC national statistics bureau have yet to result in tangible improvements in the real world. Nevertheless, they maintain that the current strategy is the correct approach, asserting that they are moving beyond “20 years of Kirchnerism.”
On Friday, INDEC unveiled a striking inflation figure, highlighting concerns over the relevance of current measurement methods. Officials acknowledge that the current Consumer Price Index methodology fails to accurately represent the contemporary consumer basket. The choice to uphold the current mechanism is driven by both economic and political considerations, facilitating comparisons with the Peronist administration under former president Alberto Fernández. In the realm of politics, tensions are escalating. In the ongoing investigation into the ‘$LIBRA’ cryptocurrency case, prosecutor Eduardo Taiana has made a significant request to lift banking secrecy on the accounts of the Milei siblings. This development could potentially complicate matters for the President and his chief-of-staff.
The establishment of a congressional investigative committee has been significantly influenced by the backing of governors including Raúl Jalil of Catamarca, Martín Llaryora of Córdoba, and Nacho Torres of Chubut. These leaders have shifted from their previous positions as allies to take a more assertive stance in Congress. The ruling party’s decision to cancel the session regarding the ‘Ficha Limpia’ anti-graft initiative stands out, as it appears to be a strategic move to circumvent a potential defeat.