BUENOS AIRES, Argentina — Argentina’s libertarian president Javier Milei signaled late Saturday that a new deal with the International Monetary Fund was imminent, as he used his annual address to congress to project following a divisive first year in office and .
In a speech that played to the sentiments of his right-wing base but included little in the way of new policy, Milei promised that, in the coming days, he would “ask congress to support the government in this new agreement with the International Monetary Fund” even as it seemed Argentina had yet to close the deal.
Revisiting the economic themes of his 2023 presidential campaign ahead of crucial midterm elections in October, Milei declared: “We went from talking about hyperinflation to talking about long-term stability.”
He cited his standard refrain about the government’s success in from a peak of 26% in December 2023, when he entered office, to just over 2% in January, and in helping the country claw its way out of a painful recession.
“We have gone from being a global laughing stock … to being an unexpected protagonist,” Milei said.
Tech billionaire Elon Musk, at the Conservative Political Action Conference last week in Washington, has as inspiration for .
“The eyes of the world are now on Argentina after a long time,” he said. ”As is the case of Elon.”
On trade policy, Milei announced Argentina would leave the Mercosur bloc of South American nations if needed to clinch a free trade agreement with the United States.
It marked administration at the expense of Argentina’s previous allies and regional partnerships.
“To take advantage of this historic opportunity, we must be willing to make things more flexible or even, if necessary, to leave Mercosur,” he said.
Dangling an IMF deal
In his speech, Milei gave no further details about the supposed new financing deal with the — in order to help lift Argentina’s strict capital and currency controls in hopes of , which, in 2024, delivered Argentina’s first fiscal surplus in 14 years.
Milei said his government would use a cash infusion from the IMF to replenish the central bank’s diminished hard currency reserves, helping prevent a possible run on the peso as Argentina attempts to lift its complex web of capital controls before the year’s end.
“This new agreement will give us the tools to pave the way toward a freer and more efficient exchange rate system for all our citizens, to attract greater investments that will translate into lower inflation, greater growth and employment levels,” Milei told congress.
Foreign companies consider the notorious currency controls, which set an official exchange rate and restrict access to dollars in Argentina, to be the greatest impediment to investing in Argentina.
The IMF, but wary about the sustainability of his austerity, has been weighing whether to lend more money to troubled Argentina, its largest debtor with a history of defaults that still owes over $40 billon for its most recent program that ended in December.
The fund did not immediately respond to a request for comment.
Facing a hostile congress
While Milei’s speech couched his successes as wins for the Argentine people, a boycott by members of , Unión por la Patria, left the typically packed legislative chamber half-empty.
The Peronist bloc controls 46% of seats in the senate and 39% in the lower house — compared with just 10% and 15% respectively for Milei’s La Libertad Avanza party.
That Milei’s political opponents remain hostile is no surprise, experts say, as the president pushes at the generally understood limits of executive power to steer around congress.
The and TV personality has in recent months, borrowing some votes from the former center-right government of Mauricio Macri to .
But Milei has largely relied on decrees and other executive powers to deregulate industries, dissolve ministries, , eliminate public works projects, and curb the powers of trade unions, .
“He showed that he can govern the country without congress,” said Sebastián Menescaldi, an economist with the Buenos Aires consultancy firm EcoGo.
Last week, Milei inflamed the political opposition by announcing he would bypass the country’s senate to appoint — one of whom has triggered backlash .
The appointments were widely criticized an overreach of executive authority that would ensure favorable rulings on his whose in federal courts.
As tensions rise between the government and lawmakers, midterm elections in October 2025 will prove crucial. A good result in the ballot would allow Milei “to make all the changes he wants and not have to make any concessions,” said Menescaldi, warning, “That could mean he becomes more authoritarian.”
Steering clear of scandal
In recent weeks, the far-right economist has confronted the biggest crisis in his 14-month-old administration after token that shot up after his endorsement and rapidly cratered, and calls for his impeachment.
into possible fraud and abuse of authority.
Milei made no mention of the crypto scandal during his speech Saturday, which lasted over an hour.
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