Argentine entrepreneurs recalibrate economic GPS ahead of run-off election

They say a victory for Economy Minister Sergio Massa would prevent a "leap into the void."

Argentina is experiencing an economic crisis and devaluation. Argentines look for a refuge in the dollar for their savings.

The resounding victory of Sergio Massa in the October 22 election surprised the business world, which is now reevaluating its strategy in anticipation of what it believes will be a new stage. Industrialists and leaders in the field agree that a win for the economy minister prevents a “leap into the void,” although they predict short-term difficulties due to the foreign currency scarcity. There is also anticipation regarding the figure of Roberto Lavagna and the call for a government of national unity.

Between surprise and relief. That’s how the Círculo Rojo (Red Circle) of business leaders were divided in response to the election results. Surprise, because many were still betting on a devalued Patricia Bullrich candidacy. In the last week, one of the leading figures in a major business group was heard saying that they “already had everything arranged with Melconian,” who was slated to be Bullrich’s economy minister. Relief because, as agricultural and industrial entrepreneurs agreed, “a victory for Massa prevents a leap into the void.”

Since October 22, business leaders have been in GPS mode, recalculating some economic variables. With the dollarization scenario moving away from the horizon, parallel dollar exchange rates have deflated. The unofficial “blue” market is at 990 pesos, the CCL around 836 pesos, and the MEP down to 823 pesos at the time of writing. Meanwhile, the futures market’s exchange rate for December has dropped from 812 pesos before the election to 608 pesos last Friday.

On this last point, a key official from the economic team highlighted that “the Central Bank’s exposure in futures contracts has decreased significantly” and noted that in recent days, the monetary authority collected a “very significant” profit in pesos. The Central Bank also closed the week with the largest purchases in the last month, accumulating more than US$401 million across all trading sessions.

“The scenario has brought tranquility to the entrepreneurs. Everyone knows Massa. They know how he governs, and they have his phone number. Now, we are clear that there will be many problems until November 20, but also that if he wins, there will be no transition because on the first business day, there will be measures. That gives some reassurance,” a prominent figure in the agribusiness sector told the Herald’s sister title, Ámbito.

Roberto Lavagna’s role

In this sector, the most dynamic in terms of exports, they are well aware that there will still be difficulties that are hard to overcome in the short term. “Regardless of the election, there are no dollars, and solving that will take time,” they say. In another sector that contributes foreign currency, the energy sector, they also appreciate the state knowledge possessed by the economy minister, but expect “five to six difficult months to stabilize the macroeconomy.”

With all these challenges ahead, this Sunday, from Tucumán, Massa reiterated his call for a government of national unity. With entrepreneurs, workers, and civil society. One leader from Buenos Aires Province who frequently interacts with Roberto Lavagna believes that such a setup, less “radicalized,” increases the possibility of a more active participation by the former economy minister in a future government.

The figure of Lavagna is music to the ears of businessmen. They believe he would bring credibility to the plan to stabilize the economy that Massa intends to promote based on the principles he has been reiterating in the campaign: increasing exports, achieving fiscal and trade surpluses, accumulating reserves, and reducing debt.

What many say quietly, others choose to make public. Agricultural businessman Bernardo Grobocopatel has announced that he will vote for the current Minister of Economy: “We have two candidates. One is a dangerous leap into the unknown, with no experience to govern, and that can be very bad for Argentina,” he said, describing Massa as “a person with a lot of managerial ability who took over the country in a very difficult moment.”

On the industrial side, José Urtubey pointed out that the victory of the Unión por la Patria (UxP) candidate was “reassuring” and labeled Javier Milei as “anti-federal and unitary,” considering him “unviable for Argentina.” In an interview on Radio 10, he also anticipated that his task in the coming days will be to “convince colleagues to revitalize a true national bourgeoisie.”

The interest that the libertarian candidate aroused in the “Círculo Rojo” since August 13 has suddenly dissipated. This curiosity was partly based on the lack of knowledge about his economic plan and the figures that would accompany him. It is now diminished by two factors: the seven-point lead that the UxP candidate has over him and the revelation of the enigma: if the adventure succeeds, his team will negotiate with Mauricio Macri, and likely, his program as well.

Between Monday and Tuesday, the candidates’ teams will have the first real polls of the runoff scenario. These are not published in the media and usually provide a more realistic view of the electorate’s movements. A versatile entrepreneur who usually spreads his bets in different baskets wondered who would contribute the US$50 million needed for this stage of the campaign if Milei does not appear in a competitive position. At this point, everyone wants to bet on the winner.


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