Milei at IDEA: a call for patience and a bet on 2027

President Javier Milei urged Argentina’s business elite for patience in the face of economic challenges, stating on Wednesday that growth processes are not linear. This message came as economic indicators tested the confidence of even his most enthusiastic supporters. Milei was attending Argentina Week, a conference in Paris, where he spoke via Zoom with José del Río, content director at La Nación newspaper.

This interview marked the close of the first day of the IDEA Colloquium in Mar del Plata, a significant event on Argentina’s business calendar. The colloquium brought together executives, politicians, and economists from Argentina’s largest companies, as well as government officials.

Economic indicators presented a challenging picture, with economic activity falling 2.9% month-on-month in July and J.P. Morgan projecting a contraction in the third quarter. Unemployment reached 7.9% in the second quarter, and country risk had risen above 600 basis points. Milei's tone was notably softer than in recent appearances, emphasizing that the program was working, but obstacles remained.

He referred to the "machine of obstruction," a veiled reference to Buenos Aires province Governor Axel Kicillof, who is a potential candidate in the 2027 presidential election.

Milei assured that his government was implementing growth-enhancing measures, such as deregulation and human capital development, but acknowledged that these efforts faced significant opposition. He framed the 2027 election as a choice between prosperity and decline, stating that if Argentines chose prosperity, he would double the pace of reforms. If they opted for decline, they would face the consequences.

The president recognized the value of waiting until after the election for investors to commit, given the need for private investment to turn a rebound into sustained growth. He outlined his tax reform goals, including lowering export duties and eliminating taxes on bank debits and credits. Milei also highlighted the removal of nearly all currency controls placed since 2019, with companies sending nearly US$4 billion in dividends abroad in the second quarter.

However, full removal would come after the election. Privatizations were acknowledged as limited, with only 11 out of 40 targeted companies approved by Congress due to institutional constraints.