Argentina’s Economic Ministers Clash As Jobs Keep Falling
ARGENTINA · ECONOMY
Key Facts
- —What happened: Argentina’s Deregulation Minister Federico Sturzenegger and Economy Minister Luis Caputo are locked in a reported rift, per Perfil.
- —The scale: Registered private-sector jobs have fallen about 3.8% since November 2023, even as economic activity grew nearly 5%.
- —What it means: Caputo reportedly wants relief measures and a softer inflation goal, while Sturzenegger wants deeper austerity instead.
- —The catch: Some officials have floated inflation below 1% in August, but most economists expect a milder 1.4%-to-1.9% slowdown.
- —Who it affects: Commerce and manufacturing firms have cut the most jobs, hitting workers hardest in and around Buenos Aires.
- —What comes next: Argentina’s statistics agency releases its official August inflation reading in mid-September, testing the government’s slowdown claims.
A reported rift between two of Javier Milei’s top economic officials is complicating Argentina’s fight against inflation and job losses.
Two of Argentina’s most powerful economic officials are reportedly clashing over how to fix a stalled economy. Perfil reports growing friction between Deregulation Minister Federico Sturzenegger and Economy Minister Luis Caputo.
The disagreement comes at an awkward moment for President Javier Milei. Registered private-sector jobs keep falling even though the broader economy is growing again.
Two Ministers, Two Very Different Plans
Sturzenegger runs the Ministry of Deregulation and State Transformation. He wants Argentina to keep cutting spending and shrinking the state.
Caputo is Argentina’s Economy Minister. He faces growing pressure to show voters real relief soon.
He is reportedly open to loosening the government’s strict inflation target. Sturzenegger opposes any softening of that goal, Perfil reported this month.
The two men also disagree on fiscal policy and the exchange rate. Some business groups want the peso to trade stronger than 1,800 per dollar, hoping that would ease import costs.
Sturzenegger’s ministry has pushed to cut agencies and jobs inside the state. Caputo’s team carried out layoffs at some of those agencies without consulting him last year, Perfil reported.
Some analysts see the fight as a proxy for a bigger question. It is whether Milei should soften his approach before voters lose patience.
A Rivalry With Deep Roots
The friction is not new. Sturzenegger and Caputo clashed over inflation targets and currency rules under President Mauricio Macri, La Política Online reported.
Back then, Sturzenegger ran the Central Bank. Caputo held Finance Ministry roles in that same government.
In April, Sturzenegger privately blamed Caputo and Central Bank Governor Santiago Bausili for a jump in inflation. That episode still shapes tensions inside the government today, La Política Online reported.
Jobs Keep Disappearing Even as the Economy Grows
Argentina’s private sector has shed jobs for months, even though output is rising again. Registered private employment is down 3.8% since November 2023, according to Fundación Pensar.
That works out to roughly 241,000 fewer formal private jobs than at the start of Milei’s term. Argentina’s economy was about 4.9% bigger in May than in November 2023, Perfil reported.
That gap between a growing economy and a shrinking formal workforce puzzles economists. Analysts call it one of the strangest features of Argentina’s recovery.
Many of the workers who lost formal jobs did not leave the labor force altogether. Some moved into informal work or became self-employed instead, several economists told Infobae.
Commerce and Manufacturing Take the Hardest Hits
Commerce and repair businesses cut about 4,200 jobs in May alone. That figure comes from EDIL, a private labor-market tracker run by University of Buenos Aires economists.
Manufacturing lost about 3,200 jobs in May. Construction cut roughly 2,000 more, Perfil reported.
Most of the losses were concentrated in and around Buenos Aires. The government’s own Labor Secretariat has confirmed a similar downward trend, Infobae reported.
The government has pointed to INDEC data showing overall employment holding roughly steady. INDEC is Argentina’s National Institute of Statistics and Census.
Critics counter that this steady headline number hides a shift away from stable, well-paid formal jobs. More workers are landing in informal or lower-quality positions instead, analysts say.
Will August Inflation Finally Drop Below 1%?
Milei built his 2023 campaign around ending Argentina’s chronic inflation for good. Getting monthly price growth below 1% would be a powerful symbol of that promise.
Some in his government have suggested August could be the month that finally happens. The Central Bank runs a monthly survey of economists called the REM, or Market Expectations Survey.
It forecasts August inflation at 1.7%, down from July’s 2.1% rate. That would be a slowdown, but not the zero-inflation milestone some officials want.
Private consultancies expect August inflation between 1.4% and 1.9%. Fundación Libertad y Progreso projects the low end of that range.
Invecq expects the high end near 1.9%, Infobae reported. No economist surveyed expects inflation to drop below 1% this year.
That means the zero-inflation milestone probably will not arrive in August. Economists say it could still happen later, once price pressures ease further.
INDEC will publish the official August inflation figure in mid-September. That report will show whether forecasters got the slowdown right.
What Comes Next for Milei’s Government
The rift between Sturzenegger and Caputo shows no sign of ending soon. Both men answer directly to Milei, who has sent mixed signals about who he trusts more.
Perfil reports growing urgency inside the Economy Ministry to show results soon. Some officials reportedly worry that public patience for austerity is running out.
How the two ministers resolve their differences could shape Argentina’s next moves on prices, jobs and the exchange rate. For now, both sides say they answer only to Milei.
More: Argentina news in English, every day from The Rio Times.
Frequently Asked Questions
Who are Federico Sturzenegger and Luis Caputo?
Sturzenegger is Argentina’s Deregulation Minister, in charge of shrinking the state. Caputo is the Economy Minister, running fiscal and exchange-rate policy under President Javier Milei.
What are Sturzenegger and Caputo disagreeing about?
Perfil reports they disagree on deregulation speed and the inflation target. They also disagree on how much fiscal relief to offer before patience runs out.
Why are private-sector jobs falling if Argentina’s economy is growing?
Economists say growth is coming from sectors like farming and energy that add few jobs. Commerce, manufacturing and construction firms keep cutting jobs instead.
Could Argentina’s inflation rate drop below 1% in August 2026?
It is unlikely. The Central Bank’s REM survey and most private consultancies forecast August inflation between 1.4% and 1.9%, not below 1%.
What happens next in this dispute?
Watch for INDEC’s official August inflation data in mid-September. Also watch for any sign that Milei has picked a side between his two ministers.
Sources: Perfil, Infobae, La Política Online, El Cronista, Argentina’s Central Bank (BCRA) Market Expectations Survey (REM), Fundación Pensar.
This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error
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