The election of Javier Milei as President of Argentina marked a turning point in the country’s politics and economy. With his radical liberal agenda and promise to restore the Argentine economy, he gained the support of a broad group of voters eager for change. Now, after a year in office, it is time for a thorough evaluation of his policies: has Milei stabilized the Argentine economy, or has his harsh austerity policy further increased social inequality?

Macroeconomic Stabilization and Financial Reforms

One of the most notable achievements of Milei’s government is the drastic reduction in inflation. While monthly inflation was still at 26% in December 2023, it has since dropped to 2.7% in recent months—the lowest level in three years. The appreciation of the Argentine peso against the US dollar also indicates increased confidence in the national currency. Furthermore, Milei managed to achieve a budget surplus—an accomplishment last seen more than a century ago.

These improvements can largely be attributed to his strict monetary and fiscal policies. The government has implemented drastic spending cuts by reducing the number of ministries from 18 to 9 and laying off 30,000 public employees. Subsidies for energy and transportation have also been scaled back, leading to higher costs for consumers but significantly reducing government expenditures.

Social Impact and Criticism of the Austerity Measures

However, economic stabilization has come at a heavy social cost. Under Milei’s leadership, an estimated five million additional Argentines have fallen below the poverty line. The severe cuts to social services and drastic reductions in healthcare and education funding have led to widespread dissatisfaction among large segments of the population.

Moreover, the rapid deregulation of import laws for foreign products has created an unfair competitive environment for small and medium-sized Argentine businesses, which are struggling to survive. This has increased unemployment and deepened social inequality. Many critics argue that Milei’s reforms favor big businesses but come at the expense of the middle and lower classes.

Political Dynamics and Governance Challenges

Milei has governed without a majority in the Argentine Congress, forcing him to rely on presidential decrees and strategic alliances to implement his reforms. His confrontational leadership style has led to political polarization and tensions within the opposition. It remains uncertain whether he will be able to sustain his reforms in the long term without broader political support.

His foreign policy has also sparked controversy. He rejected Argentina’s accession to BRICS, distancing himself from alternative economic alliances and focusing instead on an Atlantic strategy aimed at closer cooperation with NATO and Western partners. This has caused domestic divisions, as some Argentine economic sectors would benefit from stronger ties with emerging markets.

A Divided Picture: Between Success and Social Unrest

After one year of Milei’s presidency, the balance remains controversial and mixed. On one hand, there are concrete macroeconomic successes, such as declining inflation and a budget surplus, which promise a more stable financial future. On the other hand, there are significant social costs and political tensions that could lead to long-term instability.

The question remains whether Milei’s policies are sustainable and whether his extreme economic liberalism will truly lead Argentina to recovery, or if it is merely a temporary stabilization that will ultimately widen the gap between rich and poor. One thing is certain: the second year of his presidency will be crucial in shaping his political and economic legacy.