Milei Rejects Recession Talk, Says He’s ‘Calm’ About Reelection

President Javier Milei dismissed worries about Argentina’s slowing economy, stating he was "very calm" about his re-election prospects for next year. During a Bloomberg News interview in New York, Milei emphasized that the country experienced steady growth, projecting a 3% increase this year and a similar figure for the following year.

The President has managed to reduce triple-digit inflation since assuming office three years ago. However, Argentina’s economy contracted by 0.6% in the second quarter, marking the first decline in two years. Concerns over unemployment are also impacting his popularity as he enters the final year of his presidential term. Economists adjusted their growth expectations downward to 2.1% from the previous 3.5%, raising fears among investors that Milei might face a challenging re-election campaign, especially since polls indicate that joblessness is now more of a concern than inflation for the electorate.

Milei’s approval rating fell to 38% in August, marking one of the lowest points of his presidency, as per an AtlasIntel poll for Bloomberg News. Approximately 70% of Argentines described the labor market as poor, according to the survey. Since Milei's inauguration, Argentina has witnessed a loss of nearly 250,000 private sector jobs, and unemployment has risen to nearly 8%.

Analysts attribute the sluggish growth to Milei's efforts to keep prices under control. The Argentine peso depreciated by 3.7% against the US dollar this year as of August, while consumer prices surged by 21%. This real appreciation was further reinforced by official actions in bond and futures markets, despite a continued restrictive monetary policy.

Milei highlighted the creation of 520,000 jobs in Argentina, emphasizing that these positions are in the informal sector. He also alluded to the potential for continued US tariff exemptions, acknowledging that Argentina has yet to ratify its trade agreement with the Trump administration, despite signing it in February.