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In Milei’s Argentina, Economic Albatross Is Tamed but Life Is Much Harder
A year after becoming president, Javier Milei has been praised inside and outside Argentina for reining in galloping inflation. But his economic policies have inflicted widespread hardship.
Daniel PolitiLucía Cholakian Herrera and Ana Ionova
Daniel Politi and Lucía Cholakian Herrera reported from Buenos Aires, and Ana Ionova from Rio de Janeiro.
At home and abroad, Argentina’s president, Javier Milei, is a man with plenty of fans. And not just any fans.
Mr. Milei, a right-wing libertarian, may not have been an obvious choice as the first world leader to meet President-elect Donald J. Trump after his election victory. Yet there he was, at Mar-a-Lago in Florida last month, being showered with praise by Mr. Trump.
“The job you’ve done is incredible,” Mr. Trump told Mr. Milei at a gala for a right-wing research institute. “You’ve done a fantastic job in a very short period of time.”
Many Argentines seem to agree. A year after taking office, Mr. Milei is viewed favorably by about 56 percent of Argentines, according to a recent poll, making him one of the most popular presidents in the country’s recent history.
“This is the president that God brought for the Argentines,” said Marcelo Capobianco, 54, a butcher in Buenos Aires. “He brought back hope.”
While a cascade of brutal cuts to everything from soup kitchens to bus fare subsidies have pushed more than five million Argentines into poverty, they have also helped Mr. Milei make remarkable progress on a daunting task: reining in the world’s highest inflation rate.
Before Mr. Milei was sworn in, monthly inflation was 12.8 percent; now it is 2.4 percent, the lowest in four years.
Mr. Milei has followed through on bold promises to bring Argentina’s budget under control, firing more than 30,000 government workers and applying deep cuts to spending on health, welfare and education.
Before he took office, Mr. Milei’s critics questioned whether a former television pundit, who describes himself as an anarcho-capitalist, could lift Argentina out of its decade-long crisis.
In some ways, their concerns have been borne out. Mr. Milei’s unorthodox governing approach has plunged Argentina into a chaotic new chapter, as poverty rates have jumped and people have taken to the streets in protest.
“Every day, we have more people who come to eat,” said Margarita Barrientos, 63, who runs a soup kitchen in a working-class neighborhood in Buenos Aires.
But there are also signs that Mr. Milei’s strategy is working. In addition to plunging inflation, government revenue exceeds spending for the first time in 16 years and preliminary data suggest that the economy, after contracting for three straight quarters, is stabilizing and may be on track to slowly start growing.
“Happy times are coming in Argentina,” Mr. Milei said this week during an address commemorating his first year in office. He promised “sustained growth” in 2025, vowing that the country’s sacrifice “will not be in vain.”
Global investors have cheered Mr. Milei’s actions, with Bank of America declaring in a financial report that his “stabilization plan is working better than expected.”
The International Monetary Fund predicted that Argentina’s yearly inflation would fall to a more manageable 45 percent in 2025 from a record peak of 211 percent in 2023 and commended Mr. Milei on his “impressive progress.”
Argentina’s inflation figures have sometimes been questioned after past administrations were caught fudging the numbers. But the national statistics agency was overhauled in 2015 so today the figures are widely seen as credible and hew to independent estimates.
For many ordinary Argentines, however, Mr. Milei’s economic triage has been painful. His government has cut state spending by about a third, eliminating price controls and subsidies that made public transit, heating bills and groceries cheaper, leaving more people struggling to make ends meet.
Still, many see a silver lining to the government’s austerity measures.
Miguel Valderrama, who owns a small market in Buenos Aires, said he’s relieved to no longer have to endure the unchecked inflation that defined daily life before Mr. Milei’s presidency.
“There was a price in the morning, and at noon everything increased again — and again two days later,” said Mr. Valderrama, 40, who voted for Mr. Milei.
Now, with greater stability, he is able to plan his inventory without worrying about sudden price shocks. “Before,” he said, “we didn’t know how much money we would spend, how much things would cost.”
Mr. Milei’s rise to power followed decades of boom-and-bust cycles. Argentina was among the world’s wealthiest countries, but years of government mismanagement emptied its public coffers, led to multiple defaults on tens of billions of dollars in international loans and left the economy limping.
“Argentina stopped growing in 2012,” said Marina Dal Poggetto, executive director of EcoGo, a consultancy based in Argentina.
Mr. Milei, casting himself as an outsider, blamed Argentina’s economic travails on corrupt politicians who spent recklessly, describing political opponents as “thieves” who live like “monarchs.”
He warned that if he were elected president things would most likely get worse before they got better. Still, his promises appealed to many Argentines hungry for change.
Mr. Milei’s more radical plans as a candidate included closing Argentina’s central bank and abandoning the peso in favor of the U.S. dollar. But once in power, he did neither, and his policies have been far less drastic than many expected.
“The initial outlines of Milei’s program were much more reasonable than his campaign rhetoric,” Ms. Dal Poggetto said. “They were pragmatic, very pragmatic.”
But Mr. Milei’s work to tackle the country’s long-running financial challenges has angered many Argentines, sparking large demonstrations over pension cuts, rising prices and slashed university budgets.
Roberto Bejerano, 68, a retired taxi driver, said he could afford only the bare essentials on his monthly pension payments and had to give up small pleasures like dining out and buying books.
“They’re laughing in our faces when they say we’re better off” because of the government’s tough economic medicine, Mr. Bejerano said. “You don’t see it in your wallet.”
He said it troubled him that Mr. Milei “is so popular when there are so many of us who are suffering.”
Outside Argentina, Mr. Milei’s economic policies and his outspoken style have elevated his international profile. He has mercilessly mocked “woke” ideology and attacked his critics on social media, dismissing them as “socialists.” His brash style and unruly hair often draw comparisons to Mr. Trump.
Mr. Milei, in fact, has frequently expressed admiration for Mr. Trump, cheering his “formidable electoral victory” on social media.
The feeling seems to be mutual. “You’re my favorite president,” Mr. Trump said to Mr. Milei during a call last month, according to a spokesman for Argentina’s president. Two spokesmen for Mr. Trump did not respond to requests for comment.
Echoing Mr. Trump’s catchphrase, Mr. Milei has vowed to “Make Argentina Great Again.”
Elon Musk, who will help lead a new agency dedicated to reducing the size and spending of the U.S. government, has also lauded Mr. Milei. “Impressive progress in Argentina!” Mr. Musk said on X, sharing a lengthy podcast where Mr. Milei was a guest and boasted about his accomplishments.
Vivek Ramaswamy, who will help Mr. Musk lead the new agency, mused that “Milei-style cuts, on steroids” could offer “a reasonable formula to fix the U.S. government.”
But back home, Ms. Barrientos, the soup kitchen operator, said the Milei government had inflicted far too much suffering.
The country’s poverty rate rose to 53 percent from 40 percent in the first six months of the year, according to government figures.
“Right now it’s as if we don’t have a future,” said Ms. Barrientos, adding that the government was “insensitive to people’s needs.”
Many Argentines have cut back spending on basics like milk and bread. Consumption of beef in Argentina, one of the world’s top meat exporters, has fallen to its lowest level in 28 years.
Some analysts cautioned that Mr. Milei’s financial policies, including controls on foreign exchange rates, have helped prop up the peso but were making Argentina’s exports, like metals, soy and beef, less competitive.
Critics also warned that Mr. Milei’s aggressive cuts could ultimately stifle growth. Less investment in universities, research centers and hospitals could “weaken Argentina’s social and economic foundation in the long run,” said Martín Kalos, director of EPyCA Consultores, an economic consultancy.
Still, experts say Mr. Milei has succeeded in achieving the most pressing task: averting a deeper inflation spiral. And, for now, many Argentines appear to be willing to give Mr. Milei time to continue his sweeping economic overhaul.
“People feel there are certain things that had to be done,” said Mariel Fornoni a political analyst who runs Management and Fit, a polling firm. “Then, there’s the question of how much their wallets can take.”
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