We have no way of knowing how this new year of 2026 will turn out but at least we already know one thing it will not be – namely, an election year. This is positive because anticipation of last year’s midterms led to irrational reactions on the part of government and governed alike – panic attacks in the former and pre-electoral jitters in the latter reflected in such things as a scramble for dollars countered with triple-digit interest rates in a crisis which almost sunk the Javier Milei administration. But the outlook is so much smoother after the resounding midterm triumph that Milei must be tempted to run (also in another sense of the word in seeking re-election in 2027) before he can walk – already looking beyond 2026 to 2027.
MiIei largely sees the world through an economic prism where Argentina is looking good – the international forecast for 2026 is a growth of 3.8 percent, not the five percent of the 2026 Budget but almost double the average of a Latin American region generally at odds with Donald Trump’s tariff and immigration policies whereas the libertarian lion enjoys a privileged alliance with the United States. Now that the economic team has finally emerged from the trap of currency appreciation via a one percent devaluation at half the pace of inflation, the plan is that while the energy, farming and mining sectors boost the supply of dollars, the limits on printing money lead to an equally genuine demand for pesos satisfied only by selling hoarded greenbacks (the Fiscal Innocence Law) – the Central Bank then meets this demand while accumulating reserves. But this plan could also be more running before you can walk in a depressed market with continued uncertainties – the idea of a buoyant demand for pesos seems at odds with Milei’s pet slogan of “no hay plata” (“there is no money”).
The various problems lying ahead of Milei also include himself as often his own worst enemy – in the past two years his dogmas, whims and ideology have constantly thrown up obstacles in a path which the electorate has interpreted to be basically correct. To which might be added the expanding influence of his sister, Presidential Chief-of-Staff Karina Milei, whose midterm success (which could have been even more of a landslide with a different strategy, given the lack of alternatives) seems to have intoxicated her with permanent electioneering according to the words of her key ally, Congress Speaker Martín Menem: “We are already working towards presidential re-election in 2027” – the prominence of Menems in her entourage immediately evoke the frustrations of Carlos Menem’s second term largely wasted on seeking a third.
Giving priority to electioneering over administration will inevitably affect the quality of governance. In recruiting midterm candidates, Karina Milei said: “Loyalty is not an option, it is a condition,” with scant regard for ability or experience – an arena far more open to opportunists saying yes to everything than centre-right figures of greater integrity with ideas of their own to contribute. While Milei himself cuts a stellar figure abroad and while the outside world is often impressed with a helm including Economy Minister Luis Caputo (if somewhat prone to improvisation from long years trading bonds and shares) and Deregulation & State Transformation Minister Federico Sturzenegger, the levels below them tend to leave much to be desired – being on the right side of Karina Milei or a friend of star spin doctor Santiago Caputo does not always guarantee administrative competence.
This new year does not include any electoral calendar but it does come with a World Cup whose impact on the public mood cannot be underestimated. Yet football as an issue is not restricted to whether Argentina can become only the third country in history to repeat a World Cup title – the government enters 2026 embroiled in battle with AFA (Argentine Football Association) president and treasurer Claudio ‘Chiqui’ Tapia and Pablo Toviggino, in many ways easy targets because of their ostentatious corruption yet quite apart from any risk of a clash with them being perceived as disloyalty to the national football squad, their links with such key figures as 2023 Peronist presidential candidate Sergio Massa and Santiago del Estero Senator Gerardo Zamora potentially complicate legislation in a Congress where La Libertad Avanza remains a minority.
The government needs to take things not only a year at a time but month by month (with repaying over US$4 billion in debt without depleting Central Bank reserves an early challenge in January). Or even day by day.
