Argentine President Javier Milei presented a dim view of the country in his first speech in office a year ago, in the midst of an economic crisis. He warned there was “no money”, promised a shock to the economy and said things would get worse before they got better.
The crowd in front of Congress applauded his every word.
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A year later, Milei has managed to accomplish a feat: keeping that fervor burning and preventing the country from descending into fiery protests, even as he is implementing severe spending cuts that have damaged the economy and increased poverty.
The bombastic, shaggy-haired economist, who celebrates a year in office this week, has seen his fame grow globally. He became a representative of free markets and the political right, having support from Elon Musk and the president-elect of the United States, Donald Trump.
At home, he is leading a bold – if risky – experiment transforming Latin America’s third-largest economy into a rare test of libertarian free-market economics and deregulation.
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So far, he’s defying the odds.
Milei’s poll numbers are high and rising, monthly inflation has slowed from 25% to 3%, markets are rising and distortions in currency markets have decreased.
This is despite the real economy being in decline, hit by its spending cuts. The central bank’s dollar reserves have improved, but remain negative and half of Argentina’s 45 million people live in poverty.
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“Milei made huge cuts, which generated a major recession,” said political analyst Facundo Nejamkis, from the consultancy Opina Argentina. “And yet the people who voted for him continue to support him. This is what sets Milei apart.”
Part of the explanation is what came before.
Argentines elected Milei last year in a surprise election driven by anger at traditional political parties that had overseen years of recessions, fiscal deficits, defaults, currency controls and rising inflation.
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This gave Milei more room for maneuver – and time.
“We are on the right path… We came from a difficult situation, the country was in decline,” said José Bosch, a 40-year-old lawyer from Buenos Aires, adding that prices are starting to stabilize and salaries are recovering lost ground.
Although life is difficult, Bosch is willing to wait for growth to resume.
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“In my personal situation, I can bear this, although I don’t know for how long,” he said. “What we Argentines are always thinking about urgently is the economy.”
Milei’s rise from economic analyst to president shook Argentina and had repercussions abroad. His austerity, his plans to shrink the state and his “anti-woke” rhetoric have made him the darling of the conservative right and free markets.
If Milei is successful in the longer term, he could reshape Argentina’s political environment. He could win more seats in Congress in next year’s midterm elections, which would increase his ability to push through reforms.
His government, however, faces a new difficult phase: reviving the stagnant economy, ending exchange controls that have proven difficult to undo, and maintaining control over popular dissatisfaction over the high cost of living and cuts affecting retirees. and public servants.
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