Roasted for everyone? In the Argentina of Javier Milei and Luis Caputo, Esperanza smokes to the rhythm of a seductive headline: “The reserves exceed 40 billion and inflation drops to 1.5%.” The epic of the adjustment is disguised as an economic miracle and even the IMF is “very content.” Meanwhile, the news announces-without blushing-that the purchasing power is recovered in dollars-by moving that the cost of living increases more in dollars. But is this real or just another fiction? The Argentine experience is generous in macroeconomic cosmetics before collapse. It was in 2001. It was in 2018. And it is now being, with a new menu where roast is just a metaphor; The town, again, will be the one that ends on the grill.
The mirage of reservations
The government celebrates a milestone; The gross reserves of the Central Bank (BCRA) would have reached 40,461 million dollars, thanks to a repo agreement for USD 2,000 million with a bank consortium. But details matter. More than 60% of the financing comes from Chinese banks, while Western entities – as JP Morgan or cites they asked to remain anonymity. According to Bloomberg, the American treasure expressed its annoyance directly to Caputo, who would have received an explicit call from the Secretary of the Treasury, Scott Besent. Far from a sovereign achievement, the operation reveals a alarming financial agency and a new commitment to Beijingwhich further stresses the already conditioned relationship with the IMF.
Disinflation or blender?
INDEC announced an inflation of 1.5% in May – the lowest level since 2020 – driven by a strong drop in the price of vegetables. However, a report from the Center for Studies for Argentine Recovery, under the UBA, warns that the middle class experiences a “serious deterioration of purchasing power” due to the excessive rise of services and rates. The apparent salary improvement is illusory: 59% of household spending is destined to essential services, which represents a ten -point rise compared to the previous year. Far from recovering well -being, Most Argentine families resign meat, clothing or recreation to pay light and gas.
Bonds, Rest and Smoke
The economic team announced with euphoria the tender of a new bonte and the repurchase of puts for 5.8 billion pesos in the hands of banks. In addition, the BCRA eliminated the Lefis and leaned for a monetary scheme of aggregates with emission control. Government enthusiastic analysts praise the “most coherent” approach, although they omit that much of these measures are held with debt at high rates and volatile instruments. In parallel, bonds are thrown in dollars for residents and foreigners, while Capital stay restrictions are raised, which could facilitate future capital escape in case of trusted crisis. If the stability depends on external debt and hurried placements, Sustainability is a fragile promise.
IMF AND OFFICIAL STORY
Julie Kozack, FMI spokeswoman, celebrated the measures “in favor of disinflation and accumulation of reserves.” But the technical mission, originally scheduled for June, was postponed to July. The delay reflects the body’s doubts about the real government capacity to meet the target of accumulating US $ 4.4 billion. A Contragoan, Caputo relativized the weight of that goal and said that “the accumulation of reserves does not have the importance it had before.” The phrase, as unorthodox as arrogant, reveals the behavior pattern; Minimize structural problems, celebrate transitory effects, and build a story to the measure of markets … or electorate.
The déjà vu of a crisis announced
As in 2001, the figures are accommodated, the bonds are placed, the organisms applaud and the middle-media class adjusts their consumption. And as then, Everything seems under control until, suddenly, it ceases to be. Milei-capital administration is supported in a fragile architecture; growing debt, borrowed reserves, a recessive economy and a armored story by related means. The narrative of success is built with Selective statistics and silence about social costs. When the true numbers emerge and the smoke of the supposed roast is dissipated, it may be too late.
Director of Esperanza Foundation. https://fundacionesperanza.com.ar/ UBA postgraduate professor and masters in private universities. Master in International Economic Policy, Doctor of Political Science, Author of 6 Books
Source: Ambito
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