ARGENTINA – Confidence in the government fell again in September

According to the Universidad Torcuato Di Tella’s monthly survey, confidence in the government fell by 8.2% MoM (following a 13.6% drop in the previous month) to 38.8% in September, marking the lowest level since Milei took office in December 2023. Furthermore, confidence in the government is 32.1% below the peak in December 2023. Relative to the previous administrations, confidence is above Alberto Fernández (September 2021) yet below Mauricio Macri (September 2017). It should be noted that the September government confidence survey was the first conducted since the alleged corruption case at the National Disability Agency came to light. The survey was largely carried out after the LLA's defeat in the Buenos Aires elections on September 7.

All components dropped in September. The "concern for the general interest" fell by 15.1% MoM and the "honesty of public officials" decreased by 3.7% MoM. Additionally, the "ability to solve the country's problems" fell by 3.1% MoM, and the "efficiency in the management of public expenditure" decreased by 11.2% MoM. The "general evaluation of the government" fell by 11.5% MoM.

Our take: The decline in government confidence occurred in a context of corruption allegations, eroding household confidence, combined with high volatility in interest rates and ARS depreciation. Since, however, support from theU.S. Treasury contributed to a relative stabilization of Argentine assets and an appreciation of the peso. However, the reintroduction of currency controls on financial dollar purchases could lead to a widening of the gap between the official and parallel exchange rates. In summary, the next four weeks will be crucial for Milei’s image and the nationwide outcome in the October 26 elections. The next government confidence report will be published on October 27, just one day after the midterm elections.