ARGENTINA: “Stay the Course” Says IMF & more – 1st May 2025

¡Buenos días from Greenway Parks! This is the Rorshok Argentina Update from the 1st of May twenty twenty-five. A quick summary of what's going down in Argentina.

As Pope Francis lay in state in the Vatican, Argentina—his homeland—paid tribute with solemnity and symbolism. Buenos Aires marked the occasion with its own memorial Mass at the Metropolitan Cathedral, where Francis once served as archbishop, followed by a candlelit overnight vigil, live broadcasts of the Vatican ceremony, and a procession through key sites of his life and ministry.

Slum priests organized a communal lunch in Plaza de Mayo and invited residents from the city’s poorest neighborhoods to walk in Francis’s footsteps—literally. The procession wound through places that shaped his mission: hospitals, prisons, recovery centers, and shantytowns.

On Friday the 25th, President Milei traveled to Vatican City to attend the funeral. He kept his remarks brief and respectful, but faced some criticism for arriving after the casket had already been sealed. Nevertheless, he was present at the funeral on Saturday the 26th.

While the country mourned, some unexpected news came from the economic front. Argentina saw an increase of 2% in per capita money supply in February compared to January, which surprised analysts, who expected less. Sectors like manufacturing, mining and trade saw decent gains, and even construction rebounded slightly. That said, if you zoom out, the economy is still down more than 5% year-on-year.

On the import front, the government is trying to reassure exporters that a devaluation isn’t on the table, despite growing skepticism in the market. Officials recently met with agricultural leaders, urging them to sell grain now because the dollar is expected to drop, not spike. They stressed that the current export tax cuts are only temporary and hinted at future reductions in check taxes and withholdings. But the strong peso is making Argentine products pricey abroad and at home.

Kristalina Georgieva, the International Monetary Fund (or IMF) chief, is urging Argentina to stay the course with its economic reforms. After meetings in Washington, she praised Milei’s bold measures but reminded everyone that the toughest part—lowering inflation and restoring growth—still lies ahead.

But not everyone was on the same page. Axel Kicillof, the Buenos Aires Province Governor, demanded an investigation into Georgieva, accusing her of interfering in the midterm elections by backing Milei’s policies. He says she crossed a line by publicly endorsing the government’s direction, which would be a breach of the IMF’s requirement for neutrality. Kicillof, backed by fellow Peronists and socialist lawmakers, is pushing for her removal if the IMF finds that she violated ethics rules.

On top of the IMF, the government is also negotiating a new loan backed by JPMorgan and Citi to fund a key gas pipeline expansion. The money would help connect the Vaca Muerta shale formation to more export terminals. That could be a game changer for energy exports and dollars coming into the Central Bank.

Speaking of Vaca Muerta, several Argentine provincial governors flew to Houston for an energy summit this week. They pitched opportunities in oil and gas—especially Vaca Muerta—to international investors. The goal is to attract more dollars for infrastructure and exploration.

As governors court international investors abroad, back home, the rules of the political game are shifting. The Buenos Aires Province voted to scrap the primaries for this year’s midterms, but skipped the timeline changes that Governor Kicillof had pushed for to move the elections forward. While Peronist lawmakers backed the measure, internal divisions blocked adjustments to the electoral calendar.

Federico Sturzenegger, the Minister of Deregulation, is also making some strategic moves. He announced this week that the government will launch a major overhaul of the state structure in the coming weeks. The plan, which involves a series of decrees, is aimed at reducing overlapping agencies and cutting unnecessary red tape created by self-financing public bodies.

Here’s a change that everyone welcomes: YPF, Argentina’s state-run oil company, announced a 4% price cut for fuel starting Thursday the 1st of May. This is the first reduction in nearly a year, reflecting the recent slowdown in inflation and a stronger peso. Other fuel companies are expected to follow suit.

For public transport, things are not looking so bright. If you live in Buenos Aires and rely on buses or the subway, get ready: starting in May, fares are going up by about 5.7%, as part of the government’s plan to cut subsidies. The city points out that it’s still cheaper than in many other cities, but for daily commuters, that’s little consolation.

As a heads-up, the UTA, Argentina’s bus drivers’ union, just called for an open-ended nationwide strike starting on the 6th of May, after talks with business chambers fell apart once the government’s mandatory negotiation period expired. Union reps from Buenos Aires and the surrounding suburbs pushed for the strike, pointing to the steep drop in workers’ purchasing power. If no deal comes through soon, the strike could leave thousands without their usual way to commute between the capital and the suburbs.

From buses and subways to planes, for the first time since its nationalization in two thousand eight, Aerolíneas Argentinas says it won’t need government funding to operate next year. The airline told officials it can manage its twenty twenty-five budget without tapping into public money—a major shift after years of heavy losses and about eight billion dollars in subsidies. The news gives a boost to President Milei’s push to overhaul the airline sector, which has struggled with high costs and frequent strikes.

Since being marked for privatization last September, the airline has made sweeping changes, including cutting staff by 15%, shutting down some offices and routes, and streamlining operations—moves that helped it turn a $20 million profit so far this year.

On that note about planes, Admiral Alvin Holsey, the head of US Southern Command, landed in Argentina on Monday the 28th for a three-day visit focused on boosting military and security cooperation. He met with President Milei, Luis Petri, the Defense Minister, and top military officials, and visited Ushuaia in the south to tour the Integrated Naval Base, which plays a crucial role in guarding key shipping lanes and supporting Antarctic missions.

If you find yourself passing through the Palermo neighborhood sometime before the 12th of May, be sure to stop by La Rural. The Buenos Aires International Book Fair is back, a beloved cultural event. Riyadh, the capital of Saudi Arabia, is the first Arab city to be featured as Guest of Honor, with events exploring Arab literature and its connections to Latin American themes like identity and diaspora.

But it’s not all about the Middle East—authors from over forty countries are offering more than 1,500 activities across two weeks. The fair also features conversations about AI in publishing, digital education, and indigenous storytelling.

A few blocks away, in the Alto Palermo shopping mall, Victoria’s Secret is opening its first full-range store in Argentina. Slated to open in the last quarter of twenty twenty-five, the 400-square-meter store will offer everything from the brand’s classic lingerie to its full beauty line, including fragrances and body mists.

Now, while you’re browsing books at the fair or maybe shopping for lingerie at Alto Palermo, why not plan a visit to the new Patagonia Azul provincial park? The southern Chubut province has established this vast natural reserve stretching over 295,000 hectares along the Atlantic coast. The park, which is part of the UNESCO-recognized Patagonia Blue Biosphere Reserve, aims to protect marine life and promote sustainable development. It’s home to diverse species like whales, sea lions, and penguins, and includes islands, reefs, and intertidal areas vital for marine biodiversity.

The park will also feature visitor-friendly infrastructure, including ranger stations, campsites, and trails.

Aaand that’s it for this week! Thank you for joining us!

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¡Nos vemos la próxima semana!