Argentina's Bold Experiment - A Year Under Javier Milei
Argentina, once among the world’s wealthiest nations, has spent decades grappling with numerous economic crises. Its output could simply no longer fund the level of government spending, subsidies, and benefits.
The country reached a significant crossroads. The solution meant major cuts to government programmes, subsidies, and benefits, while increasing taxes and privatising many government utilities. If executed, the result would see a significant hit to the standard of living within the country. It was not a particularly appealing political pitch, but it was remarkably popular. The hope was that it was the bitter medicine that the country needed to finally clear out generations of economic malaise and rebuild from the ground up.
This is what Javier Milei represented, and despite his somewhat unconventional rise to power and brutally honest campaign message, the country rallied behind him. One year on, has it worked?
Since taking office, Milei has embarked on a radical overhaul. Government ministries have been consolidated, subsidies slashed, and many public utilities privatised. These cuts have caused significant hardship—utility and food prices have surged, public transport costs have risen, and thousands have lost their jobs.
However, early results show signs of progress. Argentina is running a sustained fiscal surplus for the first time in years, and inflation has begun to ease (from highs of around 200%!). Retail sales are up (albeit from severely depressed levels), the unemployment rate is falling, and tourism is returning.
Milei’s strategy is a gamble, asking the nation to endure profound discomfort today for a shot at lasting stability tomorrow. Will the public give the strategy long enough to play out? The danger is, as ever, that Milei is voted out of office too early to see meaningful fruits of his labour.
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