Argentina’s S&P Merval Index has risen by 162.85% year-to-date, beating the gains in the S&P 500 Index and other emerging stock market indices.
What Happened: S&P Merval’s staggering gain, comes as the country emerged from a severe recession in the third quarter of the current fiscal and amid Argentina’s President Javier Milei‘s plans for cryptocurrency adoption.
The South American country’s GDP grew by 3.9% from July to September compared to the previous quarter, exceeding expectations of 3.4%. However, it shrank 2.1% from the previous year, less than the anticipated 2.6% contraction.
The country endured a recession for three quarters, with over half of the population in poverty, inflation eroding wages, and the labor market losing hundreds of thousands of jobs. Milei's austerity measures deepened the downturn, especially with cuts to public spending and infrastructure projects, a key source of employment.
Additionally, regulators from El Salvador and Argentina have signed an agreement to develop the crypto industry in both countries. The partnership will help El Salvador expand its crypto presence, leveraging strategic collaborations, according to CNAD President Juan Carlos Reyes. The two agencies will also share knowledge and expertise on crypto regulation.
See Also: Elon Musk Praises Argentina’s 31% Spending Cuts Under Milei – But What About The Recession?
Why It Matters: Milei’s big plan for his second year as president involves removing currency exchange restrictions, allowing citizens to transact in any currency, including cryptocurrencies like Bitcoin BTC/USD. Tax payments will still require Argentine pesos.
This policy aims to stabilize the economy, reduce inflation, and promote sustainable growth by aligning with global financial standards. It emphasizes free competition, letting individuals choose the currencies that best suit their needs, and supports Milei's vision of eventually eliminating the Central Bank to combat inflation.
Milei's pro-Bitcoin stance, which predates his presidency, has bolstered confidence in the asset in Argentina. His economic policies closely mirror those of El Salvador, where Bitcoin is legal tender.
Price Action: While Argentina’s Merval Index has outpaced gains in all other indices, Turkey’s BIST 100 is the next emerging market index to follow with a 31.3% gain, year-to-date. Bitcoin’s price has grown by 141.25% in the same period.
| Emerging Markets | Index | YTD Performance |
| Argentina | S&P Merval | 162.85% |
| Turkey | BIST 100 | 31.13% |
| China | CSI 300 | 15.93% |
| South Africa | South Africa Composite | 13.46% |
| India | Nifty 50 | 12.72% |
| Brazil | Ibovespa | -6.89% |
| South Korea | Kospi | -7.94% |
| Mexico | IPC Mexico | -11.39% |
Among the developed market economies, the S&P 500 remains the best index with a 28.07% gain on a year-to-date basis, outperforming all the other developed market indices.
| Developed Markets | Index | YTD Performance |
| United States | S&P 500 | 28.07% |
| Germany | DAX | 21.14% |
| Japan | Nikkei 225 | 18.29% |
| Hong Kong | Hang Seng | 17.41% |
| Singapore | STI | 17.32% |
| Spain | IBEX 35 | 15.68% |
| United Kingdom | FTSE 100 | 7% |
| Switzerland | Swiss Market | 4.76% |
| France | CAC 40 | -2.31% |
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