Macri reappears as market jitters grip Argentina amid Milei's falling poll numbers

Financial markets in Argentina experienced jitters following a dip in President Javier Milei's public approval ratings. The country's risk premium, a measure of investor confidence, climbed to its highest point in two months, reversing a previous downward trend. This shift coincided with growing unease over an increase in loan defaults among individuals struggling to manage current expenses.

While few investors anticipate a return of Kirchnerism in its previous form by 2027, there is a palpable fear of populist economic policies resurfacing. Statements from La Rioja Governor Ricardo Quintela, who suggested a future Peronist government might pursue expropriations and nationalizations, have amplified these concerns. Some analysts believe such rhetoric could inadvertently benefit Milei by reinforcing public fear of a return to past economic models.

Adding to market uncertainty are the upcoming U.S. midterm elections in November. A potential defeat for Donald Trump's Republican party could divert the attention of a key American ally who has been supportive of Argentina's financial needs. The emergence of potential center-right alternatives, such as media executive Daniel Hadad and banker Jorge Brito, has also deepened investor doubts. While their ideas are not inherently opposed by economic operators, their candidacies could fragment the vote, potentially weakening Milei's chances of securing a first-round victory.

These market signals have prompted concern within the political wing of Milei's government, leading to increased contact between his sister and chief of staff, Karina Milei, and former President Mauricio Macri. Leaders from Macri's PRO party, who feel they have been mistreated by the current administration, have indicated that they are sought out only when difficulties arise. If PRO were to field its own presidential candidate, it might not win but could prevent Milei from securing an outright victory in the first round, a scenario that La Libertad Avanza officials acknowledge they are keen to avoid.

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