Argentine

No one anticipated last Sunday midterm election result in Argentina. Not even the executive, that faced a dire situation on the way to the election. Unexpectedly, Donald Trump himself came to President Milei’s rescue and the election´s results surprised everyone in the Argentine political spectrum.

The political campaign couldn´t be worse for the incumbent. First, in early September it lost a provincial election in key Buenos Aires province (home to 40% of Argentines). Second, Milei’s sister and top political advisor was accused of bribery. Third, his top candidate for national lawmaker at, again, the crucial Buenos Aires province had to step down amid accusations of being funded by a suspected narcotrafficker. Fourth, even though Milei has been very successful in slashing inflation, from over 200% annually to around 20%, this came with a hefty price. He cut subsidies to poor families and utilities, increase interest rates and open the economy to imports. According to the World Bank, economic activity plummeted a 1.7% in Milei’s first year in office while projections for 2025 economic growth hover around 3% to 4%. Finally, the Argentine peso faced strong devaluation pressures for several weeks prior the election that dried good part of Central Bank´s reserves.

It was at this point that Trump stepped in. He gave a 20bn US$ bailout that kept the peso´s devaluation under control during the crucial days previous to the election. He even offered to increase the economic assistance to 40bn depending on the elections’ result. Trump defied internal criticism, both from Democrats and Republicans for giving money to record high foreign debt defaulter Argentina.  

Astonishingly, the election’s result couldn´t be better for the government. It won at the national level with over 40% of the votes while the Peronist got 35%. It won in all but 8 of the 24 provinces, including Peronist stronghold, Buenos Aires province. It has greatly increased the president´s party congressional power, giving him the chance to defend his presidential decrees and vetoes and even advancing crucial legislation with the help of allies. Key among Milei´s projects is the reform of the 1974 labour law. This law repeatedly resisted reform attempts by pro market administrations in the past and has been blamed for Argentina´s far from successful private sector performance.

At the same time, the election has weakened the Peronists presidential aspirations since this voting could not produce a clear leader in their political arc. The same goes for other opposition candidates with presidential ambitions. In sum, this election has infused new life to the Milei administration and gave him the chance to pursue his agenda with renewed strength.

The other big winner is Donald Trump. He has successfully influenced an election in one of Latin America’s largest country. From here on, Argentina’s alliance with the US will only deepened. In the mind of those who voted Milei for president and were now doubting whether to cast their ballots for him again, the US support acted as a huge catalyst in making up their minds. The group of those seeking a profound alliance with the US in Argentina (traditionally an anti-American country, as Latino Barometer polls has shown across the years) has only grew.

Nevertheless, one important pitfall lies ahead: Argentina’s relations with China. China is currently Argentina’s major trading partner while the US ranks fourth after Brazil and the EU. Former Brazilian president and Trump ally Jair Bolsonaro faced the same situation: he tried at first to sever its economic ties with Beijing, only to find massive opposition from exporters at home. Will political affinity trump (no pun intended!) trade interests? The Argentine case will act as a litmus test of the future of the relationship between the US, Latin America and China.

Oct. 22 (UPI) — American cattle ranchers are calling on the Trump administration to abandon plans to buy Argentine beef, as the rift between the two sides deepens.

President Donald Trump has been arguing to buy beef from the South American country as an effort to lower beef prices at U.S. grocery stores, while U.S. cattle ranchers are criticizing his plan as misguided and harmful, stating it will have little effect on grocery bills.

“The National Cattlemen’s Beef Association and its members cannot stand behind the President while he undercuts the future of family farmers and ranchers by importing Argentinian beef in an attempt to influence prices,” NCBA CEO Colin Woodall said in a statement.

“It is imperative that President Trump and Secretary of Agriculture Brooke Rollins let the cattle markets work.”

The cost of beef in the United States has hit records this year, steadily rising since December. According to the USDA’s Economic Research Service, the cost has increased 13.9% higher in August compared to a year earlier and is predicted to increase 11.6% percent this year.

The rift between Trump and cattle ranchers opened earlier this week when Trump told reporters on Air Force One that they are considering importing beef from Argentina to get those prices down.

Argentina, led by vocal Trump ally President Javier Milei, earlier this month entered a $20 billion financial bailout agreement with the United States.

The bailout has attracted criticism from American farmers, already hurting under the weight of Trump’s tariffs. In particular, soybean growers were upset with the bailout as the United States and Argentina directly compete in the crop for the Chinese market.

The comment about buying beef from Buenos Aires prompted swift criticism from American ranchers, already frustrated that Argentina sold more than $801 million worth of beef into the U.S. market, compared to the roughly $7 million worth of American beef sold in its market.

Trump on Wednesday said U.S. cattle ranchers “don’t understand that the only reason they are doing so well” is because of his tariffs.

“If it weren’t for me, they would be doing just as they’ve done for the past 20 years — Terrible!” Trump said on his Truth Social media platform.

“It would be nice if they would understand that, but they also have to get their prices down, because the consumer is a very big factor in my thinking, also!”

Amid the controversy, the USDA on Wednesday announced a series of actions, including those to promote and protect American beef through the voluntary Country of Origin Labeling program.

However, ranchers are saying it’s not good enough.

Farm Action, a nonpartisan agricultural sector watchdog, is urging the Trump administration to make country of origin labeling mandatory and to launch investigations into the so-called Big Four meatpackers, saying they control the price of beef, not U.S. ranchers.

“Ranchers need support to rebuild their herds — that’s how we truly increase beef supply and lower prices long-term,” the watchdog said in a statement Wednesday.

“After years of drought, high input costs and selling into a rigged market, we deserve policies that strengthen rural America, not ones that reward foreign competitors and corporate monopolies.”

Wyoming’s Meriwether Farms called on Trump to immediately use his executive powers to institute mandatory country of origin labeling.

“This is not good enough,” it said of the USDA’s initiatives announced Wednesday.

WASHINGTON — The U.S. directly purchased Argentine pesos on Thursday and finalized a $20 billion currency swap framework with Argentina’s central bank, Treasury Secretary Scott Bessent said in a social media post.

The intent is to provide assistance from the Latin American country’s economic turmoil.

“U.S. Treasury is prepared, immediately, to take whatever exceptional measures are warranted to provide stability to markets,” Bessent said, adding that the Treasury Department conducted four days of meetings with Argentinian Finance Minister Luis Caputo in Washington to come up with the deal.

Bessent has insisted that the Argentina credit swap is not a bailout. Last month, President Trump stopped short of promising Argentina’s President Javier Milei a financial bailout from the Latin American country’s economic turmoil.

Still, U.S. farmers and Democratic lawmakers have criticized the deal as a bailout of a country that has benefited from sales of soybeans to China, to the detriment of U.S. farmers.

Argentina is one of the biggest Latin American economies and the biggest borrower from the International Monetary Fund — its total outstanding credit as of Aug. 31 is $41.8 billion.

The offer to financially help Argentina comes as Trump has frequently promoted his “America First” agenda. Critics contend that the planned intervention is a way to reward a personal friend of Trump’s who is facing a critical midterm election next month.

Milei celebrated Bessent’s announcement on social media, hailing his economy minister, Luis Caputo, as “far and away, the best Minister of Economy in all of Argentine history…!!!”

Caputo was in Washington last week for talks with Bessent about the swap line.

Argentina’s deregulation minister, Federico Sturzenegger, also congratulated Caputo and the rest of the economic team. “Let’s keep working so that our children want to stay and live in Argentina,” he wrote, adding a pitch to voters to support Milei in the crucial midterm elections later this month.

Hussein writes for the Associated Press. AP writer Isabel DeBre in Buenos Aires contributed to this report.

Sept. 24 (UPI) — The U.S. Treasury is preparing a $20 billion currency swap with Argentina, Treasury Secretary Scott Bessent said Wednesday. He announced the plan after Argentine President Javier Milei met a day earlier with President Donald Trump at the United Nations General Assembly.

Bessent reiterated the United States is “ready to do whatever it takes to support Argentina and the Argentine people” in a message on X in which he also praised Milei’s leadership.

He added that the United States “is prepared” to buy Argentina’s dollar-denominated debt.

“We are also prepared to provide significant backup credit through the Exchange Stabilization Fund, and we have been in active discussions with President Milei’s team to do so,” Bessent said.

The announcement amounts to a prearranged “loan” that would give Argentina’s government dollars in exchange for pesos, with the commitment to repay the funds within a set period at an agreed interest rate. The main goal is to prevent the economic adjustment program led by Milei from failing.

The Argentine president thanked the United States for its support in a post on X, writing, “We deeply value our friendship with the United States and its commitment to strengthen our partnership on the basis of shared values. Together we will build a path of stability, prosperity and freedom. MAGA!”

Argentina is facing a fragile economic situation: Central Bank dollar reserves are running low, the peso is losing value and the risk of recession is growing.

Against that backdrop, the agreement Bessent announced is intended to give Argentina a financial reserve to pay debt, stabilize the exchange rate and reassure investors. Without that support, the government would face greater difficulties slowing the peso’s decline and containing inflation — issues at the center of Milei’s economic policy.

In addition, the World Bank said Tuesday it is “accelerating support for Argentina,” combining public financing, private investment and capital mobilization to “deploy up to $4 billion in the coming months.”

The bank said the package will target “key drivers of competitiveness,” including “unlocking mining and critical minerals; boosting tourism as a source of jobs and local development; expanding access to energy; and strengthening supply chains and financing for small and medium-sized businesses.”

The official statement in Washington said the move “builds on the $12 billion support package announced in April” and “reflects strong confidence in the government’s efforts to modernize the economy, advance structural reforms, attract private investment and create jobs.”

The World Bank added that “all proposed operations will be subject to approval by the Executive Board.”

Economy Minister Luis Caputo welcomed the announcement and thanked the World Bank for its support. He said the financial reinforcement is a sign of backing for the reforms under way. “The World Bank not only provides resources, it also gives confidence in the economic strategy we are carrying out,” Caputo said.

Also Tuesday, the Inter-American Development Bank said in a statement it is “working to significantly expand its operations in Argentina over the next 15 months” to increase support for the country.

The plan combines sovereign financing with private investment. It includes $2.9 billion in five new public-sector operations in 2025, plus $1 billion through IDB Invest directed at strategic sectors.

Following the U.S. financial support announcement, markets reacted with optimism: Argentine bonds posted sharp gains, stocks extended their recovery and the country’s risk index dropped, reflecting improved perceptions of solvency.

At the same time, the peso strengthened against the dollar, a sign that government intervention and expectations of outside assistance helped ease pressure on the exchange rate.

Taken together, the moves showed the announcement was seen as immediate relief for Argentina’s finances and a signal of greater short-term stability.

Sept. 9 (UPI) — Financial markets dealt Argentina a harsh blow after President Javier Milei’s coalition suffered a major defeat in midterm elections in Buenos Aires province, the country’s largest district.

The market reaction to Milei’s electoral setback was immediate: the peso fell about 5%, the S&P Merval index dropped more than 10% and several ADRs — shares of Argentine companies traded in New York — lost as much as 20% during the day Monday.

The “country risk” — which measures the premium investors demand to hold its debt over U.S. Treasury bonds — jumped above 1,000 basis points for the first time since Oct. 24.

After Monday’s rout, markets saw a technical rebound Tuesday, with the S&P Merval recovering by 2% to 3% and ADRs rising 1% to 6%, while country risk remained elevated at about 1,108 basis points. On the currency front, the dollar gained 10 Argentine pesos, or 0.7% on the day.

The government’s electoral setback at the hands of the opposition — 47% for Peronism versus 34% for the ruling coalition — was read as a rejection of President Javier Milei’s shock program that includes spending cuts, deregulation and market openings, and as a signal the administration will face greater challenges in passing reforms and sustaining its economic plan.

Investment bank Morgan Stanley abruptly reversed its favorable outlook on Argentina after the ruling coalition’s defeat. The firm warned of increased uncertainty around reforms and cautioned about a potential deterioration in Argentine bonds, according to the Argentine outlet Perfil.

Morgan Stanley’s shift on Argentine debt was drastic, as only a week earlier it had recommended taking advantage of lower prices to buy. The firm has dropped that recommendation and withdrawn its favorable outlook on the country.

Milei had framed the Buenos Aires election as a political test ahead of the October legislative vote. He entered the contest after a sharp fiscal adjustment, amid social tensions and controversies that eroded support.

Although inflation has eased compared with 2023, the economy remains fragile and reliant on political credibility to stabilize the exchange rate and restore access to credit.

“Beyond this electoral result, I want to tell all Argentines that the course for which we were elected in 2023 will not change, it will be reinforced. We will continue to defend fiscal balance tooth and nail,” Milei said in his speech after conceding the electoral defeat.

“We will maintain a tight monetary policy. We will sustain the exchange-rate system committed to Argentines. We will redouble our efforts on deregulation.”

He added, “We will not retreat a single inch on government policy. The course is not only confirmed — we will accelerate and deepen it further.”

Although Milei has managed to reduce Argentina’s triple-digit inflation in recent months and ended the excessive spending of his Peronist predecessors, Argentines have yet to see the economic recovery that was expected to follow his harsh austerity measures.

His government has dismantled Argentina’s complex currency controls as part of a $20 billion bailout from the International Monetary Fund, analysts say, but it is still seeking the confidence of international investors who could provide the capital needed to create jobs and spur economic growth.

Argentina’s markets have tumbled, with the peso currency at a historic low, after a heavy defeat for President Javier Milei’s party at the hands of the Peronist opposition at local elections stoked worries about the government’s ability to implement its economic reform agenda.

On Monday, the peso was last down almost 5 percent against the US dollar at 1,434 per greenback while the benchmark stock index fell 10.5 percent, and an index of Argentine stocks traded on United States exchanges lost more than 15 percent. Some of the country’s international bonds saw their biggest falls since they began trading in 2020 after a $65bn restructuring deal.

The resounding victory for the Peronists signalled a tough battle for Milei in national midterm elections on October 26, when his party is aiming to secure enough seats to avoid overrides to presidential vetoes.

The government now faces the difficult choice of whether to allow the peso to depreciate ahead of next month’s midterms or spend its foreign exchange reserves to intervene in the FX market, according to Pramol Dhawan, head of EM portfolio management at Pimco.

“Opting for intervention would likely prove counterproductive, as it risks derailing the IMF programme and diminishing the country’s prospects for future market access to refinance external debt,” Dhawan said via email, referring to the International Monetary Fund (IMF). “The more resources the government allocates to defending the currency, the fewer will be available to meet obligations to bondholders — thereby increasing the risk of default.”

He said early indications that the government may double down on the current strategy “would be a strategic misstep”.

The 13-point gap in the Buenos Aires Province (PBA) election in favour of the opposition Peronists was much wider than polls anticipated and what the market had priced in. The government setback at the polls adds to recent headwinds for a market that had until recently outperformed its Latin American peers.

“We had our reservations about the market being too complacent regarding the Buenos Aires election results. The foreign exchange market will undoubtedly be under the spotlight, as any instability there can have a ripple effect on Argentine assets,” said Shamaila Khan, head of fixed income for emerging markets and Asia Pacific at UBS, in response to emailed questions.

“However, it’s important to note that simply using reserves to prop up the currency isn’t likely to provide much reassurance to the market,” she added. “The midterm elections, in my opinion, carry more weight and their outcome will significantly influence how Argentine assets perform in the coming months.”

The bond market selloff saw the country’s 2035 issue fall 6.25 cents, on track for its largest daily drop since its post-restructuring issuance in 2020.

Based on official counts, the Peronists won 47.3 percent of the vote across the province, while the candidate of Milei’s party took 33.7 percent, with 99.98 percent of the votes counted.

Argentina – one of the big reform stories across emerging markets since Milei became president in December 2023 – has seen its markets come under heavy pressure over the last month following a corruption scandal involving Milei’s sister and political gatekeeper Karina Milei where she has been accused of accepting bribes for government contracts..

The government defeat also comes after the IMF approved a $20bn programme in April, of which some $15bn has already been disbursed. The IMF has eagerly backed the reform programme of Milei’s government to the point that its director, Kristalina Georgieva, had to clarify remarks earlier this year in which she invited Argentines to stay the course with the reforms.

The IMF did not respond to questions on whether this vote result would change its relationship with the Milei administration or alter the programme.

Market selloff

Argentina’s main equity index has dropped around 20 percent since the government corruption scandal broke, its international government bonds have sold off, and pressure on the recently unpegged peso has forced authorities to start intervening in the FX market.

“The result was much worse than the market expected – Milei took quite a big beating, so now he has to come up with something,” said Viktor Szabo, portfolio manager at Aberdeen Investments.

Morgan Stanley had warned in the run-up to the vote that the international bonds could fall up to 10 points if a Milei drubbing dented his agenda for radical reform. On Monday, the outcome saw the bank pull its ‘like’ stance on the bonds.

Barclays analyst Ivan Stambulsky pointed to comments from Economy Minister Luis Caputo on Sunday that the country’s FX regime won’t change.

“We’re likely to see strong pressure on the FX and declining reserves as the Ministry of Economy intervenes,” Stambulsky said. “If FX sales persist, markets will likely start wondering what will happen if the economic team is forced to let the currency depreciate before the October mid-terms.”

Some analysts, however, predicted other parts of the country were unlikely to vote as strongly against Milei as in Buenos Aires province given it is a traditional Peronist stronghold.

They also expected the Milei government to stick to its programme of fiscal discipline despite economic woes.

“The Province of Buenos Aires midterm election delivered a very negative result for the Milei administration, casting doubt on its ability to deliver a positive outcome in October’s national vote and risking the reform agenda in the second half of the term,” said JPMorgan in a Sunday client note.

“The policy mix adopted in the coming days and weeks to address elevated political risk will be pivotal in shaping medium-term inflation expectations — and, ultimately, the success of the stabilisation programme.”

June 30 (UPI) — Argentina’s lower house of Congress will debate a bill Tuesday that would declare a two-year national health emergency in pediatric care. The measure aims to stabilize children’s medical services nationwide, with a focus on Garrahan Hospital, the country’s main pediatric facility.

The proposal seeks to ensure timely, equitable and high-quality access to pediatric care. It also calls for an immediate increase in funding for children’s hospitals and medical residency programs, with salaries updated to reflect their real value as of November 2023.

The debate comes amid a growing strain on Argentina’s public health system, marked by budget cuts, wage disputes and a wave of resignations from key hospitals.

Argentina’s public health system faces a worsening financial outlook. With no 2025 budget approved by Congress, the government extended the 2024 plan with modifications.

Health spending has dropped nearly 29% in real terms — adjusted for inflation — compared to the previous year, following a roughly 30% cut in 2023 — further straining the delivery of services and medical supplies.

The Health Ministry’s budget rose only 6% to $4.31 billion in 2025 from $4.06 billion in 2024. Its share of total government spending fell to 4.5% from 5.6%, despite annual inflation that reached 117.8% in 2024 and is projected at 28.6% for 2025, according to BBVA Research.

Alongside budget pressures, a growing shortage of healthcare workers is adding to the strain.

Argentina has 40.5 doctors per 10,000 residents — above the regional average — but their distribution is uneven, and poor working conditions are pushing professionals out of the public health system.

Delayed wages and heavy workloads are adding to the strain. Health unions warn that in many provinces, salaries have fallen below the basic cost of living, forcing staff to take on multiple jobs. About 70% of healthcare workers divide their time between public hospitals and the private sector to make ends meet, according to DataGremial.

The report also notes that several provinces and the federal government have struggled this year to fill medical residency slots — an unprecedented development blamed on low stipends and a lack of incentives to train in the public sector.

Meanwhile, demand for care remains high — and continues to rise during economic crises — as more Argentines rely exclusively on the public healthcare system. About 36% of the population, or roughly 16 million people, depend entirely on state-run coverage, according to the Health Ministry.

Garrahan Hospital has become a symbol of the country’s deepening healthcare crisis.

Since May, its staff — including doctors, residents, nurses and technicians — have staged rolling strikes and protests to demand emergency pay increases, citing what they describe as severe underfunding of the institution.

The strikes have led to the suspension of outpatient services, with care limited to emergencies and hospitalizations during walkouts, as negotiations with authorities remain stalled.

Staff shortages are beginning to take a toll. According to hospital unions, nearly 200 professionals have resigned from Garrahan in 2025. In recent weeks alone, at least 20 resident doctors left the hospital, saying their full-time wages — about $830 a month — were not enough to cover the cost of living in Buenos Aires.

President Javier Milei recently sparked backlash by falsely claiming that “70% of Garrahan’s staff is administrative” and blaming the hospital’s crisis on overstaffing. Hospital workers pushed back with official data showing that only 10% of employees hold administrative roles, while nearly 70% work in direct patient care, including doctors, nurses and technicians.

They also challenged Milei’s claim that the government had increased Garrahan’s budget by 240%. While acknowledging a nominal increase, hospital staff said inflation and stagnant wages had erased any real gains.

Amid the escalating crisis, a political response has taken shape in Congress, led by lawmakers from several opposition parties and backed by provincial health ministers.

To advance, the bill must still be reviewed by the Budget Committee, which is chaired by the ruling party. Opposition lawmakers say they plan to force debate during a special session July 2, accusing the government bloc of blocking the proposal.

BUENOS AIRES — An Argentine court on Thursday declared a mistrial in the case of seven health professionals accused of negligence in the death of soccer legend Diego Maradona, the latest dramatic twist in a trial that has captivated the nation and the soccer world for more than two months.

The whiplash decision comes after one of the three judges overseeing the trial stepped down over criticism surrounding her participation in a forthcoming documentary about the case.

Her controversial withdrawal compelled the court to either appoint a new judge in her place or to retry the entire case from scratch.

On Thursday, the judges decided the latter, effectively turning the clock back on all proceedings in the case that accuses Maradona’s medical team of failing to provide adequate care for the soccer star in his final days.

The judges ruled there would be a new trial, without specifying when.

Julieta Makintach said that she had “no choice” but to resign from the case Tuesday after the prosecutor showed a teaser-trailer for a documentary, “Divine Justice,” which traces the aftermath of Maradona’s death at the age of 60 to the start of the trailer, clearly featuring Makintach as a main protagonist.

Maradona, who led Argentina to the World Cup title in 1986, died on Nov. 25, 2020, on the outskirts of Buenos Aires, days after undergoing surgery for a hematoma that formed between his skull and brain.