Argentina Celebrates One Year of Milei’s Presidency: A Look at the Achievements and Challenges Ahead
Today marks the one-year anniversary of Javier Milei’s rise to the presidency in Argentina. The election of a self-described ‘anarcho-capitalist’ as the country’s leader was met with high expectations among libertarians worldwide. While Argentina is not yet an anarcho-capitalist paradise, significant changes have been observed during Milei’s first year in office. The country now boasts a more deregulated economy and a leaner government compared to previous administrations.
One of Milei’s most notable achievements has been the rapid balancing of Argentina’s budget. Despite inheriting a deficit of 5% of GDP, Milei managed to achieve a financial surplus within the first quarter of his presidency, a feat that has been maintained ever since. While some concerns have been raised about the sustainability of spending cuts, particularly affecting pensioners and public employees, the quick turnaround from years of budget deficits is undoubtedly a significant milestone for Milei’s administration.
The decision to halt money-printing and commit to fiscal responsibility has had a positive impact on the Argentine economy. The peso, which had been on a continuous depreciation trend, has appreciated, and inflation rates have plummeted. From a staggering 211% annual inflation rate in 2023, Argentina saw a significant improvement with a mere 2.7% inflation rate in October, the lowest monthly figure since November 2021. This newfound stability has instilled confidence in the economy and restored faith in Milei’s leadership.
In a bid to further deregulate the economy, Milei established a Ministry for Deregulation tasked with opening up closed markets and fostering competition. Through a series of executive orders and legislative measures, the government has introduced reforms such as rent decontrol, leading to a surge in available apartments and a drop in real estate prices. Additionally, the authorization of new satellite internet companies is set to revolutionize sectors like agriculture, positioning Argentina for technological advancements and economic growth.
While Milei’s focus has primarily been on economic policy, little has changed in terms of personal liberties during his first year in office. Argentina already ranks relatively high in personal freedoms according to global indices. Milei’s administration has made efforts to curb left-wing propaganda in state-run media and shut down the anti-discrimination agency, citing misuse for political purposes.
Despite the achievements of Milei’s first year, numerous challenges lie ahead. Currency controls remain in place, deterring large-scale investments, although incentives for projects over $200 million have been introduced. Trade liberalization and privatization of state-owned enterprises are yet to be addressed, while high tax rates continue to burden businesses and individuals. Addressing these challenges will be crucial in reducing poverty, which currently stands at 53% in Argentina.
Milei continues to enjoy popularity among the Argentine population, with a favorable rating of 54% according to recent polls. Market confidence in Milei’s leadership is evident, as reflected in the significant decrease in Argentina’s sovereign risk premium over the past year. Despite initial skepticism about Milei’s tenure, his enduring popularity and economic reforms have defied expectations, leaving his critics surprised.
As Argentina commemorates Milei’s first year in office, the road ahead presents both opportunities and challenges. Milei’s commitment to fiscal responsibility and economic deregulation has set the stage for a new chapter in Argentina’s history. With the support of the people and the markets, Milei’s presidency holds promise for a brighter future for the country.
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Marcos Falcone is the Project Manager of FundaciĆ³n Libertad and a regular contributor to Forbes Argentina. His writing has also appeared in The Washington Post, National Review, and Reason, among others. He is based in Buenos Aires, Argentina.
