The Latin American Report # 612

This AP cable offers a rich perspective on some critical aspects of the Argentine economy, which has received unusual and substantial support not from the IMF, but from the White House itself. In truth, the situation is far from the idyllic picture of some great recovery in industrial activity that Milei likes to promote in his interviews.

For example, of the 200 employees that a textile mill located south of the capital once had, only a handful now remain, following a sharp contraction in consumption and also "a surging competition," meaning the added pressure from imports and the omnipresent e-commerce giants like TEMU or Shein. "We're seeing an industry in crisis, and it's about to go bankrupt," said the director of the "Pro Tejer" foundation. "Not only textiles. Textiles are just the first and fastest to fall," he added.

Indeed, he doesn't seem to have much faith in the formidable injection of fresh U.S. dollars, which could amount to 40 billion if a second bailout is confirmed—although neither Washington nor Buenos Aires want to use that term. The United States is very focused on favoring Milei ahead of the upcoming elections on October 26th, but in a way, Trump's bluntness had the opposite effect when he linked the support to Milei's political destiny.

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The leader of La Libertad Avanza boasts about the drop in inflation, but again, context is needed because this was not a movement resulting from genuine stabilization, but rather from disinflation due to a collapse in consumption. In any case, "there's a new generation of demands," says an expert associated with a political risk consultancy firm. "The economy needs to grow, there needs to be job creation. I'm not sure that government is prepared to meet those demands," he adds.

Meanwhile, the current political stance of voters like Rolando Núñez point to Milei's loss of electoral capital. Hopeful because of the president's evangelical discourse, he voted for him in 2023, but in the recent legislative elections in the province of Buenos Aires, he voted for the opposition. The reasons? The medication to treat his daughter's epilepsy went up in price, his retired parents are struggling to get by, and he himself was recently fired via WhatsApp along with 300 other workers from a ceramic factory, left "without severance pay or health insurance." "What Milei promised, he didn't do. He messed with retirees, he messed with my daughter and he messed with the workers," he stressed.

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