Why Argentina’s Stock Exchange Soared and Then Slumped in 2025

The S&P Merval Index, Argentina’s key stock market gauge, climbed 172% in 2024, only to tumble 16.55% in 2025, reflecting a rocky economic path.

President Javier Milei’s bold reforms initially spurred growth, but policy shifts and global pressures later drove a sharp reversal. This journey highlights Argentina’s struggle to stabilize its economy.

In 2024, Milei slashed the peso’s 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 peso’s 11% swing against the dollar unsettled investors. The central bank’s attempts to steady the currency failed, leading many to switch to dollars for safety.

Additionally, U.S. tariffs—25% on steel and 10% on other goods—slashed export earnings by $1.5–2.5 billion. Firms like Tenaris and Aluar dropped 15% and 30%, respectively.

These tariffs, affecting 6–7% 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 Milei’s judicial appointees, raised concerns about his agenda. Investors grew wary of potential delays ahead of the October 2025 elections

These midterm elections, the first in President Milei’s 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 market’s reliance on past restrictions. Despite challenges, mostly temporary, Argentina’s 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, Argentina’s market swings reveal a dilemma: balancing economic freedom with stability. Investors monitor Milei’s reforms and global trade shifts, awaiting the Merval’s next move.