Milei's Economic Chainsaw Slashes Inflation As Argentine Stocks Explode 175%

Javier Milei took office as the President of Argentina in December 2023 and took his trademark chainsaw to the country's economic policies. Interest in several Argentina-based stocks has been rising as his drastic reforms take hold. 

What To Know: Milei, a self-described anarcho-capitalist, has implemented significant economic reforms since he took office almost exactly one year ago. He cut spending on government programs, including healthcare, welfare, and education, substantially and dismissed more than 30,000 government employees. 

Argentina's monthly rate of inflation has come down from 25% in December 2023 to 2.4% in December 2024 and the country achieved a fiscal surplus for the first time in 15 years. 

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While Milei’s policies have reduced inflation and boosted market performance, they have also led to increased poverty and unemployment rates, with significant challenges for the working class. However, a Gallup poll conducted at the one-year mark of Milei’s presidency shows his personal approval rating at 48%. 

Businesses in Argentina appear to be thriving under Milei's administration, with the country's stock market, as measured by the S&P Mervel Index, up more than 175% in 2024.

The Global X MSCI Argentina ETF ARGT, which invests in companies with exposure to Argentina and tracks the MSCI All Argentina 25/50 Index, has gained more than 65% year-to-date. 

MercadoLibre, Inc. MELI, a Latin American e-commerce company based in Argentina, is up 10% this year and shares of YPF SA YPF, an Argentina-based oil and gas company, have soared more than 150% in 2024. 

Analysts at BBVA Research said that after a brief recession in 2024, fourth-quarter data showed improvements which are complemented by renewed confidence in Argentina's government. 

BBVA Research sees a recovery for the economy in 2025 driven by private consumption and investment,  "creating a positive outlook for 2025."

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