JP Morgan supports Milei's economic direction: recommends investing in Argentina and forecasts 5.5% GDP growth.
Investment bank JP Morgan released a report recommending that its clients increase their exposure to Argentine stocks , considering that the recent price decline does not reflect the country's solid macroeconomic fundamentals.
The document, titled “Argentina Equity Strategy,” was issued this week and argues that current conditions represent an “attractive entry window” for investors, especially those with a medium- and long-term horizon.
According to JP Morgan, the Argentine economy could grow between 5.3% and 5.5% this year, driven by economic liberalization , the liberalization of exchange controls, and the structural reforms promoted by the Javier Milei administration. At the same time, it projects a sharp slowdown in inflation that would place the CPI between 23% and 25% annually.
This forecast represents a substantial improvement over previous scenarios and supports the official narrative that the economy is beginning to show signs of sustained recovery. "The recent market correction is not justified by macro data," the report states.
JP Morgan remains optimistic about Argentina? Do you see a stable economy? A good electoral outlook for the government? Galicia, Vista, and YPF are among its core portfolios.
They see cheap assets; they anticipate more liquidity if economic normalization continues . pic.twitter.com/Pg3AZqPErT
In line with its positive outlook, JP Morgan suggested an overweight position in the Argentine stock market within its model portfolio. The three companies highlighted by the bank are Grupo Financiero Galicia (GGAL), Vista Energy (VISTA), and YPF, considered strategic bets due to their growth and robustness.
The report also identifies sectors with high growth potential, such as energy, financial services, and agribusiness. According to the bank, these sectors will be the first to react to the expected macroeconomic stabilization and sustained inflows of foreign investment.
This shift contrasts with the bank's previous analysis. In mid-July, the bank published the report "Argentina: Taking a Breath," suggesting reducing exposure to sovereign bonds due to the depletion of factors that underpinned financial stability.
At the time, JP Morgan recommended unwinding positions in LECAPs and halting carry trade strategies, warning of the uncertainty leading up to the legislative elections and the limited impact of agriculture and tourism on the balance of payments.
Although the new report is optimistic, it also warns of some persistent risks: the need to refinance peso-denominated debt, the continuity of the reform plan after the midterm elections, and political stability as a condition for maintaining market confidence.
The bank's vision aligns with the government's position, which seeks to consolidate its economic program with international support and strengthen the country's appeal to investors. JP Morgan's optimism is interpreted in the Casa Rosada as a boost to Luis Caputo's economic strategy .
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