Market celebrates signs of Budget 2025: bonds jump up to 3% and country risk breaks 1,400 points

In this way, the titles sovereigns in hard currency operate with increases of up to 3% led by Global 2046, followed by Bonar 2041 (+2.8%) and Bonar 2035 (+2.1%). So, country risk breaks through 1,400 basis points, to lose 23 points to 1,377 units, the lowest level in three months.

Javier Milei’s focus in his speech was on fiscal balance and that is an element that excites the market, as well as the promise of a new management of the State. However, he did not speak of the end of the exchange rate restrictions and that is the great unknown for the City.

The Government has a minority in both legislative chambers, which forces it to dialogue to achieve its objectives: the project provides for a economic growth of 5%, annual inflation of 18.3% and an exchange rate of $1,207 at the end of December.

“Fiscal balance is a starting point rule since Argentina has no credit, with the idea of ​​solvency to control its numbers,” said economist Maria Castiglioni. “The project is not something so different from what was expected,” with the downsizing of the State, which encourages the market, he added.

S&P Merval and ADRs

In the leading panel, The S&P Merval is trading up 1.5% at 1,845,323.63 points. Advances in bank papers are highlighted, such as: Supervielle Group (4.3%), BBVA Bank (4.3%) and Banco Macro (3%).

Meanwhile, the Argentine papers listed abroad rise up to 4.2% headed by the bank BBVA; GSupervielle group (+4.2%); Loma Negra (+3.8%) and YPF (+3.4%).

What does the Government expect for the economy in 2025?

In numbers, For next year, the Government expects the economy to grow by 5%, inflation to slow to 18.3% (1.4% monthly on average), that the The official dollar advances at a pace similar to prices and is located at $1,207 in December, a primary surplus of 1.3% of GDP and a balance in the financial result of the Treasury. These are the main macroeconomic data contained in the budget project that the Executive Branch submitted to Congress. It also confirmed that the PAIS Tax will end, with the fiscal data contemplated in the budget.

“Fiscal balance (of the budget) is a starting point rule since Argentina has no credit, with the idea of ​​solvency to control its numbers,” said economist Maria Castiglioni.The project is not so different from what was expected“with a reduction in the State, which generates the approval of the market, he added.

“Milei in Congress once again gave another example of the great commitment to avoid the fiscal deficit. However, he did not mention the restrictions, inflation and reserves, The three chapters that today raise the most doubts among investors. “In any case, a deficit-free budget in Argentina is quite an achievement that should not be underestimated,” said Roberto Geretto of Fundcorp.

“The new budget project is very ambitious, something unusual for decades in the country, but now we will have to see if it is approved and how real its implementation is. The fact that the Government is committed to not spending more than it collects is already an achievement, as in any normal house,” said analyst Marcelo Rojas.

“Our thesis for Argentine equities is constructive. We believe that beyond the market’s own movements of profit-taking and temporary declines, If the international context supports the long-term trend, it is bullish And if the Government continues to show results, there is no reason to rule out breaking historical highs in the medium and long term,” commented the IEB Group.

One element that, for example, draws the attention of market analysts is the fact that The inflation forecast for 2025 by the Government is much lower than that calculated by the Market Expectations Survey (REM) published by the Central Bank. While the Budget sets it at 18.3%, the City’s is around 38%. The market is wondering whether this is due to an underestimation by the Government.