¡Buenos días from Greenway Parks! This is the Rorshok Argentina Update from the 31st of December twenty twenty-five. A quick summary of what's going down in Argentina.

To kick things off this week, President Milei has secured a major legislative victory. On Friday the 26th, the Senate passed the twenty twenty-six budget bill with forty-six votes in favor. This is a historic moment for the current administration, as it is the first proper budget Congress has approved since Milei took office. The plan projects a 5% increase in the money supply and an annual inflation rate of about 10% for the coming year.

However, as we anticipated in our last episode, lawmakers completely rejected chapter eleven, a controversial section aimed at repealing emergency laws that guarantee funding for public universities and people with disabilities. Milei had previously vetoed these funding boosts, but Congress overrode him. To maintain his zero-deficit goal without this chapter, the President warned he will now have to reallocate funds and make deeper cuts in other state areas.

Along with the budget, the Senate also approved the Fiscal Innocence law. This new legislation changes the tax system to assume taxpayers are innocent until proven guilty. This law officially raises the threshold for tax evasion investigations. Previously, you could be investigated for spending as low as one thousand dollars if the source wasn’t clear; now, that limit is one hundred million pesos, or about 68,000 dollars. The government hopes this encourages people to use their mattress dollars—savings kept outside the banks—without fear of immediate prosecution.

Speaking of dollars and debt, Luis Caputo, the Economy Minister, announced a shift in how the country handles its debt. He stated that Argentina will try not to issue any new debt under New York law this January.

For decades, Argentina has issued bonds under foreign law, specifically in New York, to make them more attractive to global investors who didn’t trust local courts. However, this led to massive legal battles with vulture funds and even the seizure of an Argentine Navy ship in Ghana back in twenty twelve. Caputo now wants to phase out this dependence on Wall Street and encourage a local credit market where Argentines fund the country themselves.

While the government works on the national balance sheet, your personal budget will likely face some pressure in January. A new wave of price hikes is set to hit. Rents for those under older contracts will see an annual update of over 36%. Additionally, prepaid health plans are rising by nearly 3%, and you can expect higher bills for fuel, electricity, and water as the government continues to adjust utility rates and subsidies.

Public transport is also getting more expensive, with bus and subway fares in Buenos Aires rising by 4.5% in January.

Meanwhile, in the energy sector, twenty twenty-five has ended as a record-breaking year. The Vaca Muerta shale fields in Patagonia pushed oil production to an all-time high of over 800,000 barrels per day in November.

This record was possible because of massive efficiency gains, as crews increased well connections by 30% this year. Strategic pipeline expansions also finally solved the bottlenecks that had been trapping oil in the ground for years. This created a massive energy trade surplus of nearly seven billion dollars. For the first time in years, energy (not agriculture) is the primary driver of Argentina’s trade surplus.

Since we mentioned trade, the Port of Buenos Aires is overhauling its tariff structure. Starting the 1st of January, the government is removing a tax benefit that previously gave a 100% discount on certain port fees. The administration argues that the port must be financially sustainable under its new private management model. Local business leaders, however, are concerned that this will significantly increase the cost of moving goods in and out of the country.

In the aviation sector, Chile’s Latam Airlines has been granted a full license to operate domestic flights in Argentina again. The airline’s Argentine subsidiary folded in twenty twenty, cutting 1,700 jobs. At the time, Latam blamed the business climate during the pandemic and a lack of support from local industry actors. Now, under the new Open Skies policy, they can return without needing a local branch, though they haven’t set a date for their first flight yet.

Shifting to some controversy in the sports world, the Argentine Football Association, or AFA, is facing a financial issue. An investigation by the La Nación news outlet says that forty-two million dollars of AFA income was moved to shell companies in Florida. While Chiqui Tapia, the AFA President, isn’t named in the banking records, the wife of the association’s treasurer is reportedly a recipient of some of those funds. This comes as the association is already under investigation for alleged money laundering.

We’ve got more about football, as fans have a date to save. The Finalissima between Argentina and Spain is now confirmed for the 27th of March. The match will take place at the Lusail Stadium in Qatar. It will be a massive showdown, likely featuring Lionel Messi for Argentina and eighteen-year-old star Lamine Yamal for Spain.

On that note about football icons, River Plate is planning a major modernization of its stadium in Buenos Aires city. The club will soon announce a project to add a roof to the Monumental and expand its capacity to 100,000 spectators. The club says the team will be able to continue playing their home matches while the work is done in phases.

In other news, it was a complicated week for travelers. On Saturday the 27th, extreme heat caused the asphalt to crack and peel at Buenos Aires City’s Aeroparque Jorge Newbery airport. Authorities had to suspend all flights for three hours to make emergency repairs. The shutdown caused a massive domino effect, delaying over fifty flights and diverting others to Ezeiza International Airport.

That infrastructure failure was caused by a dangerous heatwave. The National Meteorological Service issued an orange alert for Buenos Aires as temperatures hit forty degrees Celsius (about 104 Fahrenheit) on Wednesday the 31st. The worst is over, though, as cooler winds are moving in from the southeast.

Meanwhile, in the northeastern province of Corrientes, the town of San Luis del Palmar is in a state of emergency after four hundred millimeters of rain fell in just forty-eight hours. More than four hundred people have been evacuated. The local mayor blamed the severity of the floods on a dredging project that has been blocked by environmental lawsuits for years.

In more uplifting news, a hospital in Trelew, in the southern province of Chubut, celebrated a rare medical miracle. On Christmas Day, a mother gave birth to identical triplets. All three girls and their mother are doing well. Ignacio Torres, the Governor, praised the professional work of the local medical team, noting that such a high-risk birth is a major test for any health system.

Meanwhile, toy sales were down nearly 7% this year compared to twenty twenty-four. Industry reports suggest that families were more cautious with their spending and generally preferred locally-made toys over expensive imports. Neighborhood toy stores saw an average spend of about thirteen dollars per gift. Retailers are now looking toward Three Kings Day on the 6th of January to make up some ground.

And to close this edition, we have a special recommendation. If you too have fallen into the pistachio craze, we recommend reading an essay titled The pistachio boom in Argentina clashes with the water crisis over at Dialogue Earth’s website. This piece, written in English by Jorgelina Hiba, examines how this green gold is growing in the arid western province of San Juan, even as the region faces a decade of drought.

Check the article with the link in the show notes!

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

Before we head out, we just want to wish you an awesome twenty twenty-six! Thanks so much for listening, sharing the show, and being part of the Rorshok community.

¡Nos vemos la próxima semana!