The S&P Merval Index, Argentinas key stock market gauge, climbed 172% in 2024, only to tumble 16.55% in 2025, reflecting a rocky economic path.President Javier Mileis bold reforms initially spurred growth, but policy shifts and global pressures later drove a sharp reversal.
This journey highlights Argentinas struggle to stabilize its economy.In 2024, Milei slashed the pesos value by 50% and enforced tight capital controls.
Investors rushed to stocks to shield their savings, boosting the Merval, which is led by export firms.Companies like Metrogas soared 236%, and a rare budget surplus fueled confidence, making the index a global standout.
Yet, 2025 turned challenging.
On April 14, Milei lifted capital controls after securing a $20 billion IMF deal, prompting a 17% Merval surge.But the pesos 11% swing against the dollar unsettled investors.
The central banks attempts to steady the currency failed, leading many to switch to dollars for safety.Why Argentinas Stock Exchange Soared and Then Slumped in 2025.
(Photo Internet reproduction)Additionally, U.S.
tariffs25% on steel and 10% on other goodsslashed export earnings by $1.52.5 billion.
Firms like Tenaris and Aluar dropped 15% and 30%, respectively.These tariffs, affecting 67% of exports, strained dollar reserves, further pressuring the peso.
At home, inflation fell to 3.73% monthly by March 2025, down from 55.9% annually, signaling improvement.However, political setbacks, such as the Supreme Court rejecting Mileis judicial appointees, raised concerns about his agenda.
Investors grew wary of potential delays ahead of the October 2025 electionsThese midterm elections, the first in President Mileis term, will renew 127 of the 257 seats in the Chamber of Deputies and 24 of the 72 seats in the Senate.As a result, Merval firms, heavily tied to exports, struggled with fluctuating dollar revenues.
With capital controls gone, investors sold shares, causing a 10% drop in April.Stocks lost appeal as dollars became a safer bet, exposing the markets reliance on past restrictions.
Despite challenges, mostly temporary, Argentinas economy shows promise.It grew 5.7% in February 2025, with 5.5% growth projected for the year.
Oil and gas prospects, like Vaca Muerta, may attract investment.
Yet, peso volatility, tariffs, and political risks create uncertainty.In summary, Argentinas market swings reveal a dilemma: balancing economic freedom with stability.
Investors monitor Mileis reforms and global trade shifts, awaiting the Mervals next move.