The Monday after the elections, the Merval index measured in dollars registered an intraday rise of more than 30%its biggest increase in more than thirty years. In turn, several Argentine stocks rose up to 36%, driven by a wave of investment euphoria that combined political expectation, positive reading of the electoral result and speculation about a change in economic direction.
At the international level, sovereign bonds also reacted strongly. The country risk, which was close to 1,000 basis points, plummeted to 650 pointsmarking a technical adjustment of more than 35% in a few hours. This behavior reflects a recovery of financial confidenceboth by local investors and international funds that had reduced their exposure to Argentine assets in recent years.
This strong correction in country risk has a transcendental meaning: if the indicator manages to consolidate below the 450 basis points, Argentina could reopen its access to international debt markets. This would not only benefit the national State, but also the provinces and the private corporate sector, which could refinance at reasonable rates abroad after several years of exclusion from global credit.
During recent months, the Argentine economy has gone through a stage of contraction, with falls in key sectors and loss of real purchasing power. One of the most representative cases is that of metallurgical sectorwhich according to a recent report, showed a 6.1% year-on-year drop in Augustaffected by the drop in domestic demand, the rise in financial costs and exchange rate uncertainty.
In this context, the new government has the opportunity to align the financial with the productive, a challenge that has historically been pending in the country. For decades, Argentine economic policy tended to prioritize nominal stabilization and short-term balancewithout consolidating a model of sustained growth based on production, employment and export competitiveness.
One of the central points of this new stage will be the policy of interest rates. Currently, real rate levels in Argentina continue to be high, with a contractionary effect on economic activity. The companies They encounter serious difficulties in financing working capital or investment projects at rates that, in many cases, far exceed the expected profitability of their operations.
Therefore, it is essential that the Central Bank progress towards a process of convergence towards neutral ratesthat is, levels that do not discourage productive credit or fuel inflation. A gradual and orderly reduction in rates would allow companies to take credit again, reactivating private investment, production and, consequently, employment.
Credit should not only be oriented to consumption, but also to financing of production and exports. The possibility of accessing lines of investment in machinery, technology or infrastructure is key to improving industrial competitiveness. In a country where manufacturing productivity has fallen steadily in the last decade, this point is essential for reverse the trend and enhance exports with added value.
He International Monetary Fund (IMF) has been clear in its demand to accumulate net international reserves, a necessary condition for stabilize the exchange rate and reduce volatility. However, this goal—although necessary—cannot become the only objective of economic policy. The accumulation of reserves It must be the result of a model that generates genuine foreign exchange, through the export of competitive goods and services, and not only short-term exchange or financial measures.
Therefore, the government’s real challenge will be improve investment, employment and productivity indicators. The sustainability of growth cannot be based solely on the financial capital flowbut in the ability to generate real wealth and quality employment. In this sense, a modern productive policy should include tax and credit incentives for SMEswhich are responsible for more than 70% of the country’s formal employment and have particularly suffered the effects of the recession and the cost of credit.
The improvement in the prices of Argentine assets and the reduction of country risk can translate into a new wave of interest from foreign investorsas long as the government achieves guarantee clear rules of the game and macroeconomic stability. Financial normalization would allow the arrival of capital aimed not only at purchase of bonds or sharesbut also to direct investment projects in strategic sectors such as energy, mining, agribusiness, technology and manufacturing.
He foreign direct investment (FDI) flow has historically been low in Argentina compared to emerging economies with similar characteristics. However, with a scenario of exchange stability and regulatory predictability, the country could attract productive capital againwhich would allow diversifying the export matrix and reduce dependence on external financing.
The overwhelming electoral result provides the new government with a solid political mandate, which must be capitalized to carry out the necessary reforms. This social and political support constitutes a fundamental tool to advance the convergence between financial and productive variables, something that the Argentine economy has not achieved for a decade.
However, the euphoria of the markets must be interpreted with prudence. Trust is a valuable assetbut also ephemeral. Transforming this financial boost into sustainable growth requires planninginstitutional dialogue and coordinated policies between the public and private sectors.
If the Government manages to establish a roadmap that combines fiscal discipline, reduction of inflation, production incentives and credit stimulation, the economic cycle could enter an expansionary phase after several years of stagnation.
Sunday’s election result not only redefines Argentine politics: open a new economic stage. Today the country has the concrete possibility of align the financial system with the productive apparatusso that capital flows, credit and monetary policy are at the same time service of real development and not speculation.
If the Government takes this opportunity to consolidate macroeconomic stabilityimprove the competitiveness and strengthen productive creditArgentina could begin a path of growth sustained that transcends electoral cycles. The key will be in transform market euphoria into lasting confidencewith an agenda that prioritizes investment, employment and productivity.
Argentine economic history shows that periods of financial stability are rare, but also that each of them represented a starting point towards structural transformations. This time, the difference could be that balance is not only sought in the monetary variables, but also in the real economywhere the value and work that sustain the development of a country.
Source: Ambito
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