Financial Times: Milei's economic plan faces a gap between macro stability and internal stagnation

A two-speed diagnosis

The Financial Times published an analysis titled "Milei's economic plan under pressure," which evaluates the balance of Javier Milei's administration three years after his inauguration. The British newspaper identifies an economy moving at different speeds: while macroeconomic indicators show significant improvements, internal activity and household welfare face persistent deterioration.

The outlet acknowledges that the Argentine government managed to reduce inflation from a peak near 300% to 34%, maintained one of the few fiscal surpluses in the world, and decreased financing costs. These advances, attributed to the austerity, deregulation, and opening program, would have placed public finances in a stronger position than in previous decades, according to some economists cited in the article.

However, the Financial Times warns that this stabilization coexists with a stagnant economy. The distance between export sectors, which concentrate new investments, and the domestic market, which suffers a contraction in demand, has become one of the main challenges of the economic program.

Warning signs: employment, wages, and debt

The analysis details the consequences of the adjustment on the everyday economy. According to data from the consultancy Equilibra cited by the newspaper, real wages remain around 10% below the levels of early 2023. This is compounded by the loss of approximately 300,000 formal jobs since the start of the current administration, according to official figures.

The financial situation of households also shows tensions. The Financial Times points out that about six million people in Argentina have difficulties paying their debts, a record that President Javier Milei himself has dismissed, characterizing the widespread complaint that "people cannot make ends meet" as a "colossal stupidity."

The British media cites JPMorgan, which considers that Argentina could be entering a technical recession, defined by two consecutive quarters of Gross Domestic Product (GDP) contraction. This situation is linked to fiscal adjustment, high interest rates, and a restrictive monetary policy that, while seeking to contain inflation, limits consumption and investment.

The paradox of export sectors

The article describes a fragmented economy. On one hand, sectors such as mining, energy (especially Vaca Muerta), and traditional exports of soy and meat record favorable performance and attract investments. This growth begins to alleviate the historical shortage of dollars.

On the other hand, activities linked to domestic consumption face difficulties. Companies value the flexibilization of imports and the reduction of regulations, but face weakened demand and growing competition from imported products. According to the consultancy Invecq, total investment fell by 13% compared to 2023.

Martín Rapetti, founder of Equilibra, explained this dynamic: "There are enclaves of high growth. But the rest of the economy is stagnating or contracting." The economist warned that the main problem is that the jobs lost in the activities that are receding are not absorbed by the sectors that are expanding, preventing export growth from translating into a generalized improvement in the labor market.

Political challenge toward 2027

The Financial Times links this economic scenario with the political challenge facing the Government ahead of the 2027 presidential elections. Economic discontent begins to reflect in the presidential image. According to a survey by Atlas Intel cited by the newspaper, Milei's approval rating fell from 43% in January to 38% in August.

The Government maintains that a potential reelection would allow consolidating reforms and accelerating investments worth tens of billions of dollars, especially in natural resource projects. A senior official, cited anonymously, stated: "Society has not realized how transformative the wealth of natural resources will be."

In contrast, the Peronist opposition questions the model. Axel Kicillof, governor of Buenos Aires province, stated that current difficulties are not temporary and warned: "They are building a country that is centered on raw materials in production, precarious in work, and dependent in geopolitical terms."

Political consultant Sergio Berensztein considered that the ruling party still holds electoral possibilities, but warned about Milei's competitiveness in a context of wear and tear. Former Economy Minister Nicolás Dujovne, for his part, stated that reelection would mean a generational change: "It would be the first time since [the beginning of] this century that a government can show the results of a healthy economy open to the world."

Perception in trade and industry

The Financial Times illustrates the impact of the economic plan through testimonials from small merchants. Claudia Rochelin, a 65-year-old merchant who voted for Milei in 2023, described the collapse of sales in her stationery store in downtown Buenos Aires: "This simply is not taking off. What good is it to me that prices remain the same if no one comes to buy?".

Mario Grinman, president of the Argentine Chamber of Commerce and Services, summarized the business situation during a meeting: "Are we doing well? More or less, it is a very mixed bag." This perception reflects the tension between the valuation of structural reforms and the immediate reality of falling sales and investment.

The Financial Times analysis does not offer a definitive conclusion on the success or failure of the plan, but establishes that the Government's ability to translate macroeconomic stability into a recovery of consumption, employment, and income will be decisive for its political future in 2027.