Southern Cone in May 2026: the most important developments in economy
In May 2026 the economic news of the Southern Cone centred on Argentina and its energy sector. On 14 May analysts said the conflict in the Middle East was shifting global attention to Argentina's Vaca Muerta shale formation as a potential alternative energy source, in two separate reports pointing to the region's growing strategic importance. Investment plans were announced around the same time: Vista Energy plans $1.8 billion in Vaca Muerta, one of the largest single commitments to the region's oil and gas development, and Molinos Agro announced an $800 million port and industrial complex for agricultural exports. On 8 May the government increased its stake in the state oil company YPF, and President Javier Milei announced a 'super RIGI' incentive programme to attract capital.
On the financial side, Fitch upgraded Argentina to B- with a stable outlook on 5 May, citing improved fiscal and external positions. On 21 May the IMF approved a $1 billion disbursement. The same day Argentina lowered export taxes on soy, wheat and barley, with Milei saying the cut ends agriculture's ordeal, and Congress cut gas subsidies affecting 15 provinces. By 27 May foreign reserves had reached a seven-year high and Milei eased controls on the peso, while the IMF proposed raising the Monotributo and income tax. Argentina also disclosed the interest it paid on a US swap arrangement ahead of elections, expanded beef exports and opened direct flights to China.
Not all indicators pointed upward. Argentina's auto parts industry reported sharply falling production and sales under Milei's shock therapy, while mining companies promised a 50% increase in exports. In Chile, the economy recorded its sharpest contraction since late 2022, driven by a decline in mining activity. Codelco and SQM budgeted $3 billion for a lithium project, Amazon's planned data centre advanced after residents lost an environmental challenge, and Latam Airlines expected an additional $700 million in costs from a fuel price increase.
by WorldBrief & Maksim Micheliov | AI-generated summary
Click a day in the chart above for that day's brief.