The business climate in Argentina changed, but the underlying question persists: will the economic course have political continuity? That was the big question that survived the participation of Facundo Gómez MinujínCEO of JP Morgan Argentinaat the Expo EFI event held at the Buenos Aires Convention Center.
In dialogue with economist Santiago Bulat, the Executive valued the measures implemented by Javier Milei, which he defined as a “economic organization” process, but put the focus on a key milestone of the political calendar: October legislative elections.
“It is a fundamental event. Companies and investors are looking at whether or not Milei wins those elections. That will define whether there is continuity of the course,” said Gómez Minujín.
The economic course and the doubts of the investors
The Executive praised the libertarian government for advancing with the rearrangement of the Central Bank, the deregulation, the international link and the break with the intermediaries of the social movements. However, he warned that the background distrust still persists: “We have 350,000 million dollars outside the system. We are not 100% convinced if this will succeed.”
In that sense, he said that Argentina has not yet made the structural reforms necessary to consolidate a sustained growth model. “We are stabilizing the macro, but we do not reform the pension, labor or tax regime. That is what companies ask for: lower taxes to compete.”
Particularly, he criticized the pension scheme: “You have to redo it completely. Half of the expense are privilege retirements or special regimes.”
Sustained growth and need for reforms
Gómez Minujín also raised the magnitude of the social challenge: “You need ten years growing to 5% to lower poverty from 40% to 20%.” In your vision, Current macro stability is just the first stepand asked to advance in substantive changes if international trust is consolidated.
Regarding financing, he predicted that Argentina could return to the international credit market in 2026Although he clarified that this year the country does not need to issue debt, since it can face its commitments to own resources.
“It is a condition to return to the capital market to stabilize the economy. This year is not necessary, but it is inevitable in the near future,” he added.
The support of the IMF and the global vision
Gómez Minujín held the recent agreement with the International Monetary Fund and the body’s decision to turn additional funds to strengthen reservations. “I was surprised by the extra cash, but not the agreement: the fund is endorsing what the government is already doing,” he said.
Internationally, the JP Morgan CEO was worried about the global geopolitical context, which it defined as “the most complicated since World War II”, for conflicts in Ukraine, the Middle East and Asia.
He also mentioned with concern the global impact of Donald Trump’s return and his protectionist policies: “The increase in tariffs generates uncertainty. It was clear that Trump was going to do it, the problem is what can happen now.”
Wall Street country and look
In parallel, Fernando Sedano, economist and executive director of Morgan Stanleyreinforced the optimistic analysis of the Argentine short term. “Today Argentina is the country that generates the best feeling among investors in Wall Street”he said.
However, he also warned of the collateral effects of the appreciation of the exchange rate: “There are doubts about its strength, but it is normal that there are side effects when trying to challenge the economy.”
Sedano agreed that the country risk will continue to decrease, although he warned of the recession in the United States and the impact of the monetary policy of the Federal Reserve on capital flows towards emerging markets.
Source: Ambito
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