JP Morgan highlighted the macroeconomic stabilization in Milei's Argentina

The latest report from JP Morgan highlights that the Argentine government's economic strategy is showing positive results in macroeconomic stabilization. According to the investment bank's analysis, inflation is on a downward trend while fiscal adjustment is progressing firmly.

Additionally, economic activity has begun to show signs of recovery and the real exchange rate has appreciated, which reinforces the confidence of international investors.

Key points from JP Morgan's report

• Inflation in decline: Despite market fluctuations, the reduction in inflation is a key sign of stability.
• Initial fiscal adjustment: The fiscal consolidation policy was concentrated in the government's first stage, allowing for a more controlled impact on the economy.
• Recovery of activity: Economic indicators show an improvement in real activity, suggesting that the recession could be reaching its turning point.
• Appreciation of the exchange rate: The strengthening of the Argentine peso in real terms generates favorable expectations about the sustainability of the economic program.
• Solid political support: JP Morgan highlights that the administration maintains significant political backing, contributing to the continuity of its economic strategy.

The report also analyzes the negotiation with the IMF, indicating that this could be key for the gradual easing of capital controls. According to JP Morgan, the current conditions offer a unique opportunity to strengthen the framework of economic policies in Argentina.

Outlook on the agreement with the IMF

The financial entity considers that the agreement with the International Monetary Fund (IMF) could be delayed a few weeks due to the need to solve key issues such as reserve accumulation.

In this context, the market anticipates a possible disbursement of an additional USD 11 billion within the current program.

However, JP Morgan warns that any amount below that figure could generate a negative reaction in the markets and affect investor confidence.

Uncertainty about future exchange rate policy is also a point of attention, as the appreciation of the peso has raised concerns about the competitiveness of the economy in the medium term.

JP Morgan sees light at the end of the tunnel

JP Morgan's support for the Argentine government's economic plan reinforces the perception of macroeconomic stability, but challenges persist.

The evolution of the agreement with the IMF and exchange rate policy will be crucial in consolidating investor confidence. Meanwhile, the market continues to evaluate the administration's next steps  and their impact on the real economy.