According to the Universidad Torcuato Di Tella’s monthly survey, confidence in the government rose by 5.0% MoM to 49.0% in May, marking the first increase after five consecutive monthly declines. Considering the May print, confidence in the government is only 14.5% below the peak when the government took office in December 2023.
All components rose in May. The "general evaluation of the government" increased by 8.7% MoM, the "ability to solve the country's problems" increased by 4.9% MoM, and the "honesty of public officials" rose by 4.7% MoM. Additionally, the rating for "efficiency in the management of public expenditure" rose by 4.5% MoM, and the "concern for the general interest" increased by 2.6% MoM. Consequently, even more respondents expect an improvement in the economic outlook, which rose by 1.0% MoM.
Our take: An orderly exit of capital controls for individuals, along with a sequential deceleration of inflation, has positively impacted Milei's support. The survey’s results are consistent with the positive performance of Milei’s party (La Libertad Avanza) in the recent local elections in the City of Buenos Aires. Maintaining high approval is key for the administration, with midterm elections looming at the end of October. The next government confidence report will be released on June 30.