Milei needs to win before winning

Argentine President Javier Milei is navigating a critical electoral year, needing to demonstrate tangible economic progress to counter public anxiety. While the administration has reorganized its political negotiation strategy and recalibrated its reform agenda, the successes of macroeconomic stability are shadowed by sluggish economic activity and tight household finances. Milei faces the risk that shifting electoral expectations could undermine confidence in his economic policies. Inflation is decreasing but has not met the projected 0% threshold for July, and initial hopes for a consumption boom have not materialized, with economic activity stagnating in April and May. Projections for June also indicate a downturn. The impact of disinflation on salaries remains minimal, with a significant percentage of families experiencing banking delays. Despite Vice Minister of Economy José Luis Daza's assertion that "green shoots" are emerging and the macro order is creating conditions for improvement, the phrase carries a historical burden in Argentina, having preceded past crises. The government is urging patience, seeking to foster hope that the difficult economic transition is nearing its end. A recent statement by spokesperson Adrián Ravier, suggesting the dollar could reach 1800 pesos in two months, triggered market speculation and was quickly disavowed by officials. Minister of Economy Luis Caputo's primary goal remains exchange rate stability and disinflation, prioritizing a robust buffer against currency demand over immediate consumption recovery.

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The macro order is already generating the conditions for people to start feeling improvements.