Javier Milei celebrates his first anniversary in power today. During the presidential campaign,he brandished a chainsaw and promised shock treatment to get Argentina out of the economic crisis it found itself in. A year later, has he succeeded in this mission? decryption.
As often happens in economics, it is difficult to answer a seemingly simple question with a simple yes or no. Though, initially, if we analyse the main economic indicators of the country, yes, the Argentine president Javier Miley he succeeded in the mission he had set himself.When this expert economist came to power, growth was negative, one-year inflation was 200%.The budget deficit exceeded 5% of GDP, the debt was gigantic and the peso was losing value. On this aspect, Javier Milei brought the country out of the crisis.
The Argentine president cleaned up the country’s finances. for 2025 the International monetary Fund predicts growth of 5%, while this year it is negative. But what has been most evident in the last year is the general level of prices. Each month, they are increasing much more slowly than last year. When Javier Milei came to power, monthly inflation had risen to 25% due to the sharp and brutal devaluation of the national currency. in less than a year,this inflation has been reduced to less than 3%. and then in this period the peso has revalued, the banks have started granting credit again and thus companies can invest again!
A very high social cost
This success of Javier Milei has arrived halftones. If Argentina seems to be doing better in terms of economic indicators, the measures taken over the last year by the president have had a significant impact on the lives of Argentines.Public spending has been cut. Javier Milei’s goal is to eliminate 50,000 public jobs. In one year, 33 thousand have already disappeared. Also a reduction in social spending, be it on education, higher education or healthcare. Javier Milei also suspended major public projects and ended subsidies for energy and transportation. Result: electricity in particular costs more, as do train or subway tickets.
You will have to be patient
These budget cuts, which mainly affect the middle classes, have led to an increase in poverty in the last six months Argentine. Its rate is now 53%,meaning that one in two Argentines currently lives below the poverty line. But all this doesn’t worry Javier milei. Furthermore, he welcomes the encouragement of IMF this summer. Since the economic situation is better, the International Monetary Fund has revised the repayment conditions of the 44 billion dollar loan from which Argentina is the beneficiary, thus reducing its costs.
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And then the Argentine president certifies that we will have to be patient for the standard of living to improve. It is indeed counting on the revelation of a promising deposit in Patagonia, to the south shale oil and gaswhose exports are exponential. furthermore, this year’s harvests coudl be the best in the country’s history after last year’s historic drought. But the problem is this: are the measures adopted by Javier Milei temporary or long-lasting? This is what will determine Argentina’s economic health in the coming months!
How have Javier Milei’s austerity measures impacted poverty rates in Argentina?
An Insightful Discussion on Javier Milei’s Economic Impact: An Interview with Economist Dr. Maria Rodriguez
Interviewed by the Time.news Editor
Editor: Welcome, Dr. Rodriguez. Today, we’re discussing the impact of Javier Milei’s frist year in power, especially considering his unconventional methods to address Argentina’s severe economic crisis. To start, how would you assess Milei’s approach using the chainsaw metaphor he famously utilized during his campaign?
dr. Rodriguez: Thank you for having me. Javier Milei’s chainsaw metaphor represents his radical approach to economic reform. It symbolized his promise of a drastic overhaul to rescue Argentina from its dire economic straits: soaring inflation of 200%, negative growth, and a burgeoning budget deficit that exceeded 5% of GDP. This stark imagery resonated with voters looking for change and, to some extent, he has delivered on his promises by effectively reducing inflation and stabilizing the currency.
Editor: initially, it truly seems he has made progress. Can you elaborate on the economic indicators that suggest this success?
Dr. Rodriguez: Certainly. When Milei took office, inflation was running at a staggering 25% monthly due to a severe devaluation of the peso. Within a year, he managed to bring it down to less than 3% monthly. additionally, GDP growth is projected to recover, with the International Monetary Fund forecasting a potential growth of 5% for 2025. His actions in cleaning up the country’s finances included substantial reductions in public spending, which, while painful, have contributed to these improved indicators.
Editor: while these numbers may paint a picture of recovery, they come at a important social cost. Can you discuss the implications of Milei’s austerity measures?
Dr. Rodriguez: Yes, that’s a critical point. Many of the austerity measures, including cuts to public jobs—33,000 down so far—and reductions in social spending on education and healthcare, have led to rising poverty rates, which now stand at an alarming 53%. This means one in two Argentines lives below the poverty line. The cuts have hit middle-class families especially hard, with essential services becoming more expensive due to reduced subsidies.
Editor: So, while the macroeconomic indicators show enhancement, many citizens are feeling the pinch. How has the International Monetary Fund responded to these developments?
Dr. Rodriguez: The IMF has revised the repayment conditions of Argentina’s substantial $44 billion loan, easing the financial burden on the government. this shift reflects recognition of Milei’s efforts to stabilize the economy. Nevertheless,it raises questions about the sustainability of these measures. A good immediate response from the IMF could possibly encourage Milei’s administration to pursue further economic reforms.
Editor: Milei has mentioned the need for patience regarding improvements in living standards. How realistic is this expectation in light of potential resource discoveries and agricultural forecasts?
Dr. Rodriguez: his optimism centers around the potential shale oil and gas deposits in Patagonia and the current harvest forecasts,which could be historically high following last year’s drought. However,the immediate economic relief is contingent on whether his reforms are temporary or indicate a lasting change. The structural issues in Argentina’s economy will need enduring solutions rather than swift fixes to truly improve living conditions for citizens.
Editor: As we reflect on Milei’s first year, what practical advice would you give to our readers regarding thier economic decisions?
Dr. Rodriguez: My advice would be to remain adaptable and informed. Given the current economic volatility, it’s wise for individuals to reassess their financial plans. Investing in local sectors that show promise, like agriculture and energy, could yield benefits as the country stabilizes. Additionally, staying engaged with local communities and advocacy could help push for necessary social safety nets as the government adjusts its budget.
Editor: Thank you, Dr.Rodriguez, for your insights on Javier Milei’s presidency and the broader implications for Argentina’s economy. Your perspectives will certainly help our readers navigate this complex landscape.
Dr. Rodriguez: Thank you for the chance to discuss these important issues. It’s a critical time for Argentina, and awareness is key to driving positive change.