Argentina's Milei faces declining trust as election year looms

Argentine President Javier Milei's administration is navigating a period of diminishing public confidence and dashed expectations, even as it retains a core base of support. The government, now in its ninth month, faces the challenging task of managing the social consequences of austerity measures while grappling with a populace increasingly disillusioned with unmet promises.

Economy Minister Luis Caputo recently signaled a shift in strategy, revealing to business leaders that his team is developing new measures specifically for the upcoming electoral year. This admission suggests that the current austerity plan, characterized by Milei's "chainsaw" approach, is not enough to secure the president's reelection. While not framed as a "money plan" like those seen in previous administrations, it acknowledges existing vulnerabilities and the need for further action.

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They want to generate fear and panic so that you get scared, lose confidence, and the economy paralyzes.

Caputo also adopted a more combative political stance, speculating that the opposition, particularly the Kirchnerist movement, fears losing to Milei. He suggested they are attempting to generate fear by promoting Axel Kicillof as a candidate and by highlighting potential expropriations and interference with the Central Bank. Caputo argued this tactic aims to scare businesses into paralyzing the economy, paving the way for a more "moderate" candidate to be presented later.

The government, mirroring Milei's rhetoric, has also accused media outlets and journalists of contributing to this climate of fear. This accusation is particularly notable given the government's own past use of the "kuka risk" narrative during previous elections. However, the administration faces two significant hurdles it is unlikely to overcome before the elections: the immediate material benefits of its austerity measures will not reach the majority of voters, and the country's deep-seated distrust, born from a history of economic failures, means uncertainty remains a constant.

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Then they will present another candidate who will seem moderate and they will try to install him.