Confidence in the Government of Javier Milei rose by 3.9% in June, after five months of declines

In May 2026, Argentina's leading economic indicator, known as the Índice Líder, experienced a slight increase of 0.08 percent compared to April. This brought the index to 124.73 points, measured against the year 2004 as a baseline of 100. The trend-cycle version of this index also showed a positive movement, rising to 125.61 points, which represents a marginal growth of 0.02 percent over the previous month. However, when comparing these figures to those recorded in May 2025, there was a decrease of 4.22 percent, indicating ongoing challenges faced by the economy despite the recent uptick.

The report from the Center for Financial Research (CIF) at the Torcuato Di Tella University (UTDT) highlights that while some sectors have shown signs of improvement, others have contracted. The Index of Diffusion (IDCIF) stood at 50 percent, meaning half of the ten components making up the Leading Indicator showed significant positive changes. These positive indicators included real value-added tax collection, sales to dealers, real M1 money supply, and price indices for non-metallic minerals and steelmaking. On the other hand, several factors such as consumer confidence and certain financial market indicators continued to show weakness.

Despite the modest gains observed in May, the probability of entering a recession remains high. According to the methodology used by the CIF, a recession is defined as six consecutive declines in the cyclical trend series of the Economic Activity Monthly Average (EMAE). Until February, the EMAE had been showing continuous declines from May through October, suggesting a very high likelihood of entering a recession. However, subsequent data has altered this outlook slightly. By December, the cyclical trend series of the EMAE showed five consecutive declines from April to August, but these were reversed starting in September 2025. Consequently, the probability of entering a recession began to decline gradually.

The CIF report emphasizes that the probabilities calculated are based on the previous month’s data, implying that the consolidation of a prolonged growth path still requires additional months of positive performance. While the current situation suggests a reduction in the risk of recession, sustained economic recovery will depend on maintaining consistent positive momentum across multiple periods.

In June, however, there was a notable shift in public perception regarding the government led by President Javier Milei. Confidence in his administration increased by 3.9 percent compared to May, ending a five-month downward trend. This marked the longest period of declining confidence during Milei's tenure. The Index of Government Confidence (ICG) reached 2.07 points in June, surpassing the levels seen under former President Mauricio Macri at the same stage of his presidency but remaining below those achieved by Néstor Kirchner early in his term.

The ICG has remained relatively high throughout Milei's administration, comparable to the levels seen under Macri and somewhat lower than those under Kirchner. In terms of interannual comparisons, the decline in confidence since the beginning of Milei's term amounts to 11.4 percent. Despite this, the ICG in June was higher than the corresponding figure for the first 30 months of Cristina Kirchner's administrations and significantly higher than that of Alberto Fernández.

Improvements in perceptions about the government's ability to solve problems were noted in June, with three of the five components of the ICG showing improvements relative to May. Specifically, the capacity component increased by 4.3 percent, reaching 2.46 points, matching the honesty component which remained unchanged. Efficiency saw the highest monthly increase of 12.8 percent, reaching 2.12 points. Conversely, the overall evaluation of the government decreased slightly by 0.5 percent, while the perception of concern for the general interest improved by 3.8 percent.

Public confidence varied among different demographic groups. Older individuals aged over 50 years showed the highest level of confidence at 2.23 points, representing a 4.3 percent increase from May. Younger adults between 18 and 29 years old saw their confidence rise by 1.4 percent, reaching 2.18 points. Those aged between 30 and 49 years experienced a 2.4 percent increase, bringing their score to 1.76 points. Geographically, residents outside major cities exhibited greater confidence, scoring 2.19 points, whereas within the Greater Buenos Aires area, scores were lower, with 2.03 points in Buenos Aires city and 1.83 points in the surrounding suburbs.

Confidence levels were also influenced by educational backgrounds, with those holding tertiary or university degrees showing the highest confidence at 2.20 points. Individuals who completed secondary education followed with 1.90 points, while those with primary education saw the most significant monthly increase of 42.5 percent, reaching 1.72 points and recovering levels similar to those seen in April.

Amidst these developments, political dynamics within the government remain tense. Reports indicate that President Milei has become increasingly isolated, limiting his public appearances and engaging minimally with advisors. His cabinet members appear divided, with some distancing themselves from the political turmoil affecting the administration. Meanwhile, internal discussions suggest that Milei's unwavering support for certain officials might be undermining his image as a reformist leader committed to transparency and anti-corruption efforts. This shift could affect future electoral prospects, although economic performance continues to provide some stability.