As Argentina Turns Right, Prepare for Turbulence
Investors are right to be cheered by a shift in the country’s politics, but changing its economic policies will be difficult.
Peronists rally in Buenos Aires in May.
Photographer: Natalia Favre/BloombergArgentina’s economy is expected to shrink by more than 3% this year, and its inflation rate is at a three-decade high of 114%. And yet its S&P Merval stock index is the Lionel Messi of markets — which is to say, it’s the best performer in the world, up almost 50% this year in dollar terms.
The reason for such investor optimism is clear: One of Argentina’s frequent ideological turns is imminent. While a lot can happen between now and presidential elections in October, it’s likely that the next Argentine government will be more business-friendly than the Peronist left-wing coalition that has governed the country for four chaotic years.