Argentine stocks and bonds rose after self-declared anarcho capitalist Javier Milei won Sunday’s presidential election and raised investor hopes he can fix the country’s broken economy and turn around the public finances without alienating allies with his more radical policies.

The Global X MSCI Argentina ETF soared 12.1%, while shares in state-owned energy producer YPF surged 40% on the New York Stock Exchange after Milei won a bigger-than-projected share of ballots in the presidential runoff pledging a dramatic shift away from politics as usual in the crisis-racked nation. The local stock market was closed on Monday for a public holiday.

During his election campaign, Milei pledged to dollarize Argentina’s economy, blow up the central bank and slash the budget deficit, while at the same time he lambasted critics, foreign leaders and even Pope Francis. However the 53-year-old libertarian adopted a more conciliatory stance in the run up to the runoff vote as he tried to woo moderates. Importantly, he also left out any mention of dollarization and the central bank during his victory speech, investors noted.

“We expect the first announcements of Milei’s policies to please markets, with an aggressive fiscal consolidation and a removal of foreign exchange and capital controls as the biggest priorities,” Thierry Larose, a fixed-income portfolio manager at Swiss investment management group Vontobel, told LatinFinance. “We do not expect dollarization and the closure of the central bank to be on the agenda in the near term.”

The price on Argentina’s 10-year bonds, which trade as heavily distressed, rose 1.375% to 31.335 cents on the dollar on Monday, according to Luxembourg stock exchange data.

“Argentina is finally going to down a different path,” said Beth Morrissey, a managing partner at Washington DC-based emerging markets advisory firm Kleinman International Consultants.


Investors are now waiting to see what sort of cabinet Milei puts together and how he plans to garner support for key policies without a majority in congress.

According to Mapfre chief economist Gonzalo de Cadenas-Santiago, the possible appointment of former central bank president Federico Sturzenegger as Argentina’s next finance minister “contributes to market confidence.”

“Since Milei’s party has no majority in the congress, we expect the nominations to throw a line towards the moderate centre-right coalition Juntos por el Cambio, as they have a similar agenda on a number of economic topics,” Larose added, referring to the right-of-center coalition that ruled the country from 2015 to 2019 under then President Mauricio Macri.

Milei’s radical platform appealed to voters frustrated with a political establishment that has been unable to stem the country’s worsening economic crisis. The economy is in recession, with the peso steadily devaluing, inflation touching 143% in October and the benchmark interest rate now at 133%, the highest in the world.


Milei has said he wants to eliminate the primary fiscal deficit – now at 1.3% of GDP, excluding interest payments on debts – in his first year. He also wants privatize state companies, scrap capital controls, reduce taxes, streamline regulations, shift public works to the private sector, economize the government and widen international trade.

He could face “extreme policy challenges with highly uncertain results,” according to Jaime Reusche, a sovereign risk analyst at Moody’s.

“While Mr Milei proposed forceful measures during the campaign, which could over time address the stark imbalances that currently cripple Argentina’s economic activity, distort relative prices and reduce purchasing power, these measures if enacted as outlined during the election campaign would cause an abrupt and profound economic adjustment, collapsing domestic demand and threatening financial stability,” Reusche said in a press release.

Martin Castellano, the Latin America chief economist at the Institute of International Finance, said “a painful recession in 2024 seems inevitable, no matter what policy framework prevails.” He projects negative growth of 1.3% next year.