Argentina’s case study
“Instead of talking about growth at Chinese rates, the world will soon be talking about growth at Argentine rates,” crowed Javier Milei on late-night television on April 11. His economy minister had just outlined a $20bn IMF programme, a reduction in capital controls and a shift to a more flexible exchange rate. Many of Argentina’s 22 previous IMF programmes have ended in disaster. Javier Milei’s record gives some credibility to his insistence that this time will be different. In December 2023, he inherited rampant government overspending, soaring inflation and a byzantine tangle of capital controls and exchange rates. He slashed spending immediately, pulling inflation down sharply. A deep recession is now giving way to strong growth. The rate of poverty, which rose to 53pc of all Argentines in early 2024, has now fallen back to 38pc, lower than it was when Mr Milei took office. However, political and market risks abound.
(Adapted from “Milei’s Bold Move: Making Argentina’s Economy Normal,” published on April 14, 2025, by The Economist)
SpaceX’s competition
Assuming the weather co-operates—thunderstorms have already caused the abandonment of one launch, on April 9—at some point in the coming days Amazon will get itself into the space business. A United Launch Alliance rocket is on the launchpad in Florida, carrying the first batch of 27 satellites for Amazon’s new “Kuiper” satellite-internet system. The mighty e-commerce firm hopes to deliver “high-speed, low-latency internet to virtually any location on the planet”. If the sales pitch sounds familiar, that is because it is. Kuiper is just the latest competitor in a fast-growing market for satellite broadband that is dominated by SpaceX’s Starlink. Such services are increasingly attracting the interest not just of private firms, but of governments too. Amazon’s $20bn push into orbit targets SpaceX and China. However, As juicy as the market looks, Amazon is starting from a long way behind Starlink.
(Adapted from “Amazon’s $20bn Push Into Orbit Targets SpaceX And China,” published on April 10, 2025, by The Economist)
A dollar crisis brewing
The dollar is meant to be a source of safety. Lately, however, it has been a cause of fear. A currency is only as good as the government that backs it. As markets doubt whether Donald Trump can govern competently or consistently, the dollar is taking a hit. Since its peak in mid-January the greenback has fallen by over 9pc against a basket of major currencies. Two-fifths of that fall has happened since April 1, even as the yield on ten-year Treasuries has crept up by 0.2 percentage points. That mix of rising yields and a falling currency is a warning sign: if investors are fleeing even though returns are up, it must be because they think America has become more risky. Rumours are rife that big foreign asset managers are dumping greenbacks.
(Adapted from “How A Dollar Crisis Would Unfold,” published on April 16, 2025, by The Economist)
Gold’s allure
Gold was already on a tear when President Donald Trump unveiled sweeping tariffs on much of the world earlier this month, briefly sending the price of the metal to an all-time high of $3,166 per troy ounce, up 17.4pc from the day of his inauguration. On April 11 it surged past $3,200. In one part of the world, however, that has hardly curbed consumers’ enthusiasm. Asian countries in particular are voracious buyers of the yellow metal. They accounted for 64.5pc of global demand for gold jewellery and bullion last year, not including central-bank purchases. “Rising gold prices stopping your wedding jewellery purchase?” asks a sign outside the downtown Mumbai branch of Tanishq, India’s biggest jewellery retailer. “Pay nothing for your dream,” it declares, advertising a “festival of exchange” to trade in old jewellery for new. The continent’s love of gold is partly to do with its role in important life events, especially weddings.
(Adapted from “The Biggest Bugs In The New Gold Rush Are Asian,” published on April 13, 2025, by The Economist)
Published in Dawn, The Business and Finance Weekly, April 21st, 2025
