Stop hyperinflation

Promise: to remove any restrictions on prices in the economy, and allow the reduced spending, increased reserves and investor confidence to stabilise inflation.

Reason: previous governments often restricted the prices of goods. This allowed to keep inflation lower and the products accessible at a lower price, but led to these goods selling out and being often unavailable in the shops.

Milei argued that the biggest driver of inflation was economic mismanagement, including overspending, overborrowing and unhealthy role of government in the economy.

Result: despite an initial jump in prices as market restrictions were removed, the prices quickly stabilised and have now reached 2% of monthly inflation, on track to completely normalise annual inflation next year.  

Removing price controls over rent increased the availability of free housing and allowed landlords to increase prices in line with inflation, but left some without their previously subsidised housing.

Deregulation

Promise: to remove any legal and political restrictions to business and economic activity, promoting free-market economics inspired by anarcho-capitalism.

Reason: Milei’s main principle is to push for minimal involvement of the state with any social matters, as he believes that to be the biggest driver of economic growth. 

Result: Milei has closed 10 out of 18 government’s ministries and opened the new Ministry for Deregulation, tasked with removing and simplifying legal barriers. 

331 legal regulations to doing business and economic activity were eliminated and 341 regulations were modified toward deregulation. 

Remove exchange rate controls

Promise: to move toward a completely free-flowing exchange rate of Argentinian peso to US dollar, determined by the market, by 2025.

Reason: for many years Argentinian governments have kept the peso’s exchange rate to dollar relatively high by spending currency reserves. 

This allowed to keep the prices of imported goods lower, but resulted in the these products often not being available. 

Result: Milei did not immediately remove all restrictions of the exchange rate, instead beginning with decreasing the official rate by half. 

This meant that the official exchange rate became close to the “real” free black-market exchange rate, making imports more expensive and contributing to the initial bump in inflation.

Milei’s government is likely to remove remaining exchange rate controls in 2025.

Social cost

Negative consequences of the radical reforms introduced by Javier Milei focus on the immediate fall in living standards for some Argentinians.

Poverty rate has increased to 52.9% of the population in 2024, up from 41.7% in 2023.

Higher prices and cheaper peso

• After price controls were removed, many products became more expensive. As peso became cheaper relative to dollar and other foreign currencies, imported goods also became more expensive

• Therefore, many people found themselves spending more on their regular shopping

Cut spending, benefits and state salaries

• Around 30,000 state employees have been fired under Milei’s plans

• Some Argentinian citizens stopped receiving social payments and welfare benefits, or received less of them, reducing their available income

• Others were affected by cuts in energy subsidies welfare payments or government projects

The living standards have already deteriorated significantly during the monetary crisis of 2018-2024. 

Some welfare programs were expanded by the new government, like the Universal Child Allowance or the Food Cart Program.

Milei argues that the initial increases in poverty and inflation are not a result of his policy, but instead were more accurately reflected in the statistics after price controls were removed.

However, tens of thousands of Argentinians have disproportionately received the hardships of Javier Milei’s largely praised reforms.

Environmental policy

Milei abolished the environmental ministry early in office. 

Funding for environmental policy has reduced by 65%. The work is currently split between the foreign ministry, the economy ministry and the chief of cabinet.

Milei, shortly after taking office proposed a bill which would relax regulations or reduce areas currently under protection. Including easing restrictions on economic activity in glacial areas and forests.

The government sees deregulation in forestry, tourism, infrastructure, mining, energy, oil and gas as ways to promote economic growth. 

There have been growing concerns that Milei will announce Argentina’s departure from the Paris climate accord. He has previously called climate change a “socialist lie”.

Any formal removal from the accords may follow the coming second term of Donald Trump in the US who is expected to once again remove the country from the agreement. 

Negotiators from Milei’s government were ordered to leave the COP29 climate summit in Baku, Azerbaijan after three days. 

Argentina’s economy remains heavily reliant on fossil fuels in its energy consumption. Approximately 88% of energy is sourced from fossil fuels. 

Foreign policy

Milei promised to closely align Argentina with the US, Israel and the “free world”. 

He also warned that he would cut ties with Brazil and China, Argentina’s two main trading partners. 

Milei announced a foreign policy doctrine that would align with the US and one that would not contradict ‘Western values’. 

The government rejected the country's expected entry to the expanding BRIC agreement. This decision was expected under the previous administration. 

In his first six months as President, Milei made 12 foreign visits to 10 countries. Visiting the US five times and Latin American countries only twice.

Milei does not adopt the expected role as a head of state when engaging in foreign diplomacy, leaning on Foreign Minister Diana Mondino to assume this role.  

There has been a strong shift on Argentina’s policy towards Israel. The country's embassy is expected to be moved from Tel Aviv to Jerusalem. 

Argentina abstained from a vote on a humanitarian ceasefire in Gaza. It has also voted against a resolution to admit Palestine as a full member of the UN, going against Argentina’s historic position. 

Milei’s government joined the Ukraine Defence Contact Group established by the US in 2022 to ensure military and humanitarian aid to Ukraine. 

There has been repeated criticisms that Argentina is removing itself from engagement across international issues, including social issues related to gender, human rights, climate change, social justice and health. 

Milei’s stance on China has shifted. Whilst criticising China throughout early campaigns and refusing diplomatic ties, Milei has conceded the pragmatic need to engage with international partners.