Javier Milei’s election as president of Argentina has sparked a flurry of debate and concern among investors on Wall Street. While Milei’s first speech as president-elect was characterized by unexpected moderation, his campaign platform included strong measures that could potentially address the country’s economic imbalances and restore financial stability. However, the challenges he faces are immense, with political maneuvering and social pressures likely to hinder his ability to implement corrective policies.

According to Jaime Reusche, Vice President – Senior Credit Officer de Moody’s Investors Service, “Argentina’s elected president, Javier Milei, faces extreme challenges with highly uncertain outcomes.” If enacted as described, these measures would cause an abrupt and deep economic adjustment, collapsing domestic demand and threatening financial stability. The consensus necessary to carry out the proposed reforms is critical, but this will be challenging given the divided Congress and social pressures that will influence the incoming president’s ability to implement corrective policies.

JP Morgan has also placed its magnifying glass on the risks of implementing the measures announced by Javier Milei during the campaign. The bank warned that governance risks loom given the lack of party structure and also the distribution of power in Congress after the elections generals. To mitigate these risks, JP Morgan believes that a bimonetary exchange scheme before choosing to go for a dollarization of the economy could be a viable option in the short term. However, this decision cannot be made for another year.

Regarding fiscal consolidation efforts, JP Morgan anticipates that President-elect Milei’s program would advocate for a strong adjustment of spending at both central and federal levels with the aim of eventually reducing tax burden in future years while recognizing political limitations. Meanwhile, Barclays focused on governance issues and warned that for Milei

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