"A $40bn lifeline from the US president gave Mr Milei's beleaguered government just enough credibility and apparent firepower to halt the Argentinian peso's slide. Crucially, this helped to stabilise consumer prices in the final weeks of the campaign. The US rescue engendered a short-lived aura of competence that allowed Mr Milei to shift the blame for rising prices back to the opposition, despite his own role in accelerating inflation by devaluing the currency when he took office."
"Mr Milei's wasn't a decisive triumph. His rightwing coalition got 40% of the midterms vote thanks largely to a low turnout and a fragmented opposition. His chainsaw programme of privatisation and public spending cuts has not been popular. Polls suggest that six in 10 voters disapprove. Unsurprising, perhaps: since Mr Milei took office in December 2023, Argentinians' purchasing power has fallen sharply, real wages have declined and more than 200,000 jobs have been lost."
"Matias Vernengo of Bucknell University argues that without capital controls and new policies, Mr Milei's so-called stability will end as previous neoliberal efforts did: in devaluation and crisis. Prof Vernengo, who worked at Argentina's central bank, blames the International Monetary Fund. It agreed a $20bn bailout to Argentina in April, under White House pressure, on the condition that Mr Milei removed foreign exchange controls."
Javier Milei and his allies won significant congressional seats but secured only about 40% of the vote amid low turnout and fragmented opposition. A US $40bn lifeline briefly halted the peso's slide and stabilised consumer prices late in the campaign, creating an appearance of competence that shifted blame for inflation onto opponents. Since December 2023, purchasing power and real wages have fallen and over 200,000 jobs were lost. Economists warn that removal of capital controls, conditioned by an IMF-related $20bn bailout, risks devaluation and crisis; interest-rate tools are limited without dollar reserves.
Read at www.theguardian.com
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