Argentina’s Merval index has bounced by 60% this year. Investors see “a turning point in the nation’s boom-to-bust narrative”, says Carolina Millan on Bloomberg.com. After 12 years of Peronist populist misrule, the new president’s business-friendly approach inspires confidence.
President Mauricio Macri has been busy, says John Paul Rathbone on FT.com. He has dismantled currency controls; settled a lawsuit that had locked Argentina out of international capital markets; revamped the dodgy national statistics office; and raised heavily subsidised utility tariffs.
But can he keep going? The transition to a more market-friendly system will be bumpy. The economy is in recession and inflation has reached 40%. The hope is that, once inflation falls back and growth returns, further reforms, such as tackling the “oligopoly-ridden economy”, will be possible, says Rathbone.
But people’s patience may snap, leading them back to a populist alternative. Ominously, Emilio Ilac of investment bank Puente notes that “no non-Peronist government has ever finished its term”.