¡Buenos días from Greenway Parks! This is the Rorshok Argentina Update from the 18th of December twenty twenty-five. A quick summary of what's going down in Argentina.

Kicking off this edition, President Javier Milei started the second half of his term with greater influence in Congress after his party, La Libertad Avanza, won the October midterm elections. The ruling party significantly increased its number of seats, but it still doesn’t hold a full majority.

The new congressional makeup allowed the government to launch special sessions focused on approving key measures, mainly the twenty twenty-six budget and ambitious labor, tax and criminal code reforms. Some tax changes would raise the threshold for tax evasion and ban future budget deficits. The labor reform would increase flexibility in hiring and compensation rules. Milei also plans to adjust protections for glacier regions to encourage mining, sparking environmental pushback.

His ability to build majorities will depend on alliances with other parties, especially in the lower house.

Critics of the labor reform include Argentina’s major public sector union ATE and the CGT labor federation, which called for a national strike and mass march on Friday 18th in Buenos Aires to protest against the proposal. They called it enslaving, as it undermines workers’ rights. The march to Plaza de Mayo included rallies in all provinces, in order to signal the growing union coalition's opposition against the government’s accelerated push to debate the reform in Congress.

In an update to a story from our previous show, Argentina successfully raised 1 billion dollars in a domestic dollar-denominated debt sale, its first such issue since the twenty twenty debt restructuring, as part of Javier Milei’s plan to re-enter global capital markets. The bond, coined Bonar twenty twenty-nine, priced at a 9.26% yield, drew mostly domestic investors and showed improvement over comparable secondary-market yields, reflecting better investor sentiment after Milei’s midterm election gains.

Proceeds will help cover roughly 4 billion dollars in upcoming bond payments, and the government is negotiating further financing with international banks. Even though demand topped 1.4 billion dollars, Argentina missed its sub-9% yield target, and challenges remain, such as limited hard currency reserves and ongoing currency controls.

Argentina’s Central Bank announced that, starting in January twenty twenty-six, the peso’s exchange-rate bands will adjust in line with inflation, replacing the fixed 1% monthly change that often overvalued the currency. The move is part of a broader monetary overhaul aimed at better reflecting economic conditions and strengthening market credibility, and has been welcomed by the International Monetary Fund.

The Central Bank also plans to begin accumulating international reserves, reversing its earlier reluctance to buy foreign currency, fearing it would fuel inflation. Officials said reserve purchases could reach about 10 billion dollars by the end of twenty twenty-six.

Authorities stressed that adjusting the bands with inflation does not automatically alter the exchange rate, and said the reserve-building strategy responds to rising peso demand and seeks to reinforce financial stability.

Still on economic updates, Argentina has recorded negative foreign direct investment (or FDI) for the first time in more than two decades, as a wave of multinational companies sell off local operations and exit the market. Between January and November this year, the FDI reached a net outflow of about $1.5 billion dollars, marking the first annual deficit since two thousand three.

The trend reflects a broader shift away from foreign capital, even as the government has introduced tax breaks and incentives under the RIGI program (one of Milei’s core reform policies, which offers benefits to investors in mining, oil and gas, and other industries) to attract investment.

Economists say the combination of economic stagnation, an appreciated peso and weaker domestic demand has made the market less attractive for global investors, contributing to the historic reversal in FDI flows.

On that note about foreign flows, we’ve got some news on the US-Argentina bailout. In an interview with US journalist Meghna Chakrabarti for WBUR, a renowned public radio based in Boston, economist Monica De Bolle and journalist Natalie Alcoba analyzed the rationale behind the move under which the US extended up to $20 billion in support to Argentina amid a deep economic crisis, aiming to stabilize the peso and ease market stress.

They explain that, while the US government avoids calling the arrangement a bailout—arguing that currency swaps are a standard market-stabilization tool and could generate profits— it qualifies as a bailout in practice. From their perspective, the size of the intervention and the fact that the US is stepping in to support a country outweigh the allegation that the deal is merely a neutral financial operation.

Meanwhile, Argentina’s inflation picked up pace, with consumer prices rising 2.5% in November, reaching an over 31% year-on-year inflation, according to data from the national statistics agency, INDEC. The increase marked a slight acceleration from October.

Data from the INDEC showed the sharpest rises in housing, utilities and transport, while food prices had the greatest impact across regions. Economy Minister Luis Caputo said the annual rate remains among the lowest in eight years, highlighting progress compared with previous peaks. However, higher living costs continue to strain households, with inflation pressures complicating the government’s efforts to curb prices, rebuild reserves and support economic recovery.

Going back to law reforms for a bit, let’s dive deeper into the changes that the government wants to introduce to the law that protects Argentinian glaciers. Through a bill already filed in the Senate, the government seeks to give provinces the authority to define the extent of protected glacier zones and decide whether to allow mining within them.

According to the government, this would address interpretative uncertainties in the existing twenty ten law and encourage investment in mining-rich provinces, such as Jujuy and Salta in the north, and Catamarca, Mendoza, and San Juan in the west. Environmental groups, however, warn that easing protections could put water sources at risk and weaken long-standing environmental safeguards.

Up next, air traffic controllers in Argentina have announced a series of actions that will affect both domestic and international flights during the peak holiday travel season. After talks with the Argentine Air Navigation Company (EANA) failed to resolve disputes over working conditions and agreements, the union ATEPSA said its measures will include restrictions on takeoffs at key dates in December.

The planned actions reflect lingering tensions over pay, staffing and operational issues that the union says EANA has not addressed, while the company says it remains open to negotiations. A new hearing with the Ministry of Labor is scheduled to avert or limit the impact on passengers.

In some sad news for film lovers, on Saturday 13th, renowned and beloved senior actor Héctor Alterio passed away in Madrid. Throughout his seven-decade career, he starred in four iconic Argentinian movies that were nominated for Academy Awards.

In nineteen eighty-five, he starred in La historia oficial, which received the Oscar for best foreign film. The movie remains a deep portrayal of the last Argentinian dictatorship. Alterio himself had to leave Argentina after receiving threats from the military government at the time. He also performed in La Patagonia rebelde and Plata quemada, two politically charged films that inspired new waves of movies and filmmakers.

In international news, leaders of the South American trade bloc Mercosur will meet on Saturday the 20th, ready to sign a free trade treaty with the EU. The treaty would facilitate the EU’s import of more vehicles, machinery and wines into South America, and allow Mercosur’s members to export beef, soybeans, sugar, and rice into the EU.

The treaty faces opposition from France and Italy, who say it would harm their farmers, while Germany, Spain and northern European countries support it. Mercosur leaders grow impatient, warning that if the EU rejects the treaty, the offer may not last.

And to close this edition, a recommended opinion piece published in the BA Times on the future of Argentina and its relationship with the US. The author, Norman Raimundo Bentson, explores the extreme need for a plan to build national consensus in order to grow and how, without it, all assistance from the US is useless.

Read the full article in English with the link in the show notes!

Aaand that’s it for this week! Thank you for joining us!

Don’t forget to check out our new t-shirts with the link in the show notes!

¡Nos vemos la próxima semana!