Milei’s popularity rebounds as Argentina’s markets hit record highs

Buenos Aires | Reuters — Argentina’s President Javier Milei saw his popularity ratings rebound sharply in October, a poll on Monday showed, bolstering the libertarian whose pro-market reforms have driven markets to record highs since winning a shock election last year.

A closely watched poll from the local Torcuato Di Tella University showed Milei’s approval rating jump some 12 per cent after it slid in September due to tensions around pension reforms.

The South American grains producer is battling triple-digit inflation and a recession, but former pundit Milei has managed to boost confidence in markets with tough spending cuts while largely keeping voters onside with his straight-talking style.

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Inflation, still in triple-digits on an annual basis, has come down sharply each month, foreign currency reserve levels are being rebuilt and his government has turned around a deep fiscal deficit. Poverty levels, however, have risen sharply.

A separate survey from consultancy Aresco showed the approval rating of Milei’s government bouncing to 52.5 per cent in October from 49.6 per cent a month before, which it attributed to improving economic indicators.

Milei, a political outsider, is riding a wave of voter anger with the main political parties after years of economic crises, despite a tough economic background and painful austerity measures he has pushed to try and boost the state’s finances.

His government’s non-negotiable zero deficit plan has gained huge cheers from markets, boosting bonds and stocks, while a tight monetary policy has also tamped down inflation and reduced a wide gap between official and parallel exchange rates.

On Monday bonds jumped further away from distressed territory where they had languished in recent years, rising on average 1.2 per cent. Meanwhile, a key J.P. Morgan risk index of the country’s debt hit its lowest level since mid-2019.

“The BCRA (central bank) buying reserves, new loans from international organizations, and high-frequency indicators showing October inflation at three per cent were key to the fall in country risk,” said Roberto Geretto of AdCap Grupo Financiero.

Andres Vernengo of consultancy CMA said Milei was, against the odds, making the market happy. Fears about further potential sovereign debt defaults were receding.

“Just when it seemed local assets were beginning to falter … more rabbits appeared out of the hat,” he said.

— Reporting by Jorge Otaola, Walter Bianchi and Lucila Sigal