ARGENTINA POLITICAL & ECONOMIC NEWS
BY G. BREUER
:
Political Updates
In 2025, Argentina’s midterm elections will occur, where 50% of the Chamber of Deputies and one-third of the Senate will be contested.
It is still early to determine how the various political parties will align themselves, but it appears that, at the national level, the current liberal administration led by Javier Milei is likely to ally with the right-wing PRO party, led by former President Macri, to face the center-left Peronist coalition led by Cristina Kirchner.
In January, Javier Milei attended the inauguration of U.S. President Donald Trump. Both leaders share similar views regarding the role of the state, the need for fiscal surpluses, reducing taxes and inflation, and fostering business freedom. In this context, Trump revealed that his new government office, the Department of Government Efficiency (DOGE), is inspired by the Ministry of Deregulation established by the Argentine government.
During his trip to the United States, Milei also met with the International Monetary Fund (IMF). Under the new administration, a new agreement is expected between the IMF and the Argentine government, aiming to restructure the country’s debt and secure additional funds to strengthen the Central Bank’s reserves and lift currency exchange restrictions. It’s worth noting that Argentina has maintained a currency control system since 2019.
Regarding Europe, 2024 saw progress in consolidating the regional agreement between Mercosur and the European Union. This agreement would eliminate tariffs on 92% of Mercosur’s exports, while Latin American countries would lift tariffs on 91% of imports from the European Union. The agreement, expected to boost the region’s economic activity, is anticipated to be finalized in 2025.
In terms of Intellectual Property protection, in 2024, the Argentine government expressed its support for the country’s accession to the Patent Cooperation Treaty (PCT).
In this regard, Foreign Minister Diana Mondino stated: “Argentina has set a goal to align itself with current international standards that ensure predictability and transparency in the protection of intellectual property rights.” She also highlighted “the country’s efforts to provide an appropriate environment for those who wish to invest and do business with Argentina, positioning us as a reliable and attractive player on the international stage.”
Although Foreign Minister Mondino is no longer in office, we hope that during 2025 the National Government will continue promoting policies aimed at strengthening Intellectual Property protection in our country.
Economic Updates
Consumer prices (inflation) rose by 2.7% in December 2024 compared to November, accumulating an increase of 117.8% for the year. The reduction in inflation is one of the main achievements of Milei’s administration, which began its term with inflation hovering around 20% per month:
As a result of three consecutive months of inflation below 3%, the president announced a reduction in the dollar devaluation rate. Currently set at 2% monthly (with a controlled price up to January of this year), the devaluation rate will now be reduced to 1% per month. The aim is to stabilize the exchange rate and align the official price with the market price to lift restrictions without causing abrupt currency fluctuations.
Meanwhile, the national industry is also on the path to recovery and reactivation. In November, it grew by 0.4% compared to the previous month, following a sharp decline in early 2024 as a reaction to the national government’s economic adjustment policies.
An interesting point is that in the latest World Economic Outlook report released by the International Monetary Fund, Argentina’s economy is projected to grow by 5% in 2025 and another 5% in 2026. This suggests that consumption is expected to increase, and economic activity is likely to rebound soon.
Therefore, opportunities to leverage IP are expected to grow in Argentina throughout 2025.
If you have any questions, inquiries, or comments, feel free to reach out at pbm@gbreuer.com.ar.