By John Meyer, consultant in financial affairs – Eurasia Business News, October 27, 2025. Article No 1858

Argentina’s bonds, stocks, and currency rallied strongly following the decisive victory of President Javier Milei’s libertarian party, La Libertad Avanza, in the October 26 midterm elections. Milei’s party captured around 41% of the vote, significantly expanding its representation in Congress by winning 64 seats in the lower house and 14 seats in the Senate.

This victory bolsters Milei’s mandate to continue his radical free-market reforms and austerity measures, which have earned backing from the Trump administration, including a potential $40 billion financial assistance package from the U.S.

The U.S. Treasury Secretary Scott Bessent has engaged in talks with Argentine officials to increase U.S. access to Argentina’s uranium reserves and to counter China’s sway in the region.

The market responded positively as investors gained confidence in Milei’s capacity to sustain fiscal discipline, reduce government spending, and liberalize the economy.

The Argentine peso appreciated, and bond yields dropped amid hopes for economic stability and continued U.S. support. However, Milei’s austerity policies remain controversial domestically, with concerns about their social impact, but for now, financial markets have rewarded the political clarity his win represents.

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Investors are expecting President Javier Milei to implement a series of strict fiscal measures aimed at stabilizing and reforming Argentina’s economy. Central to his approach is a targeted fiscal adjustment equivalent to about 5% of GDP, primarily through sharp reductions in government spending rather than impacting the private sector directly.

Key expected measures include cuts to public spending, elimination of tariff subsidies, reductions in capital expenditures, and decreases in fiscal transfers to provinces. Milei also aims to overhaul Argentina’s labor market, tax system, and social security framework while potentially embracing significant privatizations.

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Argentina’s GDP in 2025 is projected to grow by approximately 4.4% to 5.5%, with various sources reporting slightly different estimates. The Argentine central bank’s latest market expectations survey forecasts GDP growth to be around 4.4% for the year. BBVA Research anticipates a growth of 5.5%, while the OECD projects about 5.2%. The International Monetary Fund (IMF) has recently downgraded its forecast to 4.5%, citing persistent economic challenges. The World Bank estimates GDP growth at 4.6% for 2025. 

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© Copyright 2025 – Eurasia Business News. Article no. 1858