After winning the Argentinian presidential elections of 2023, Javier Milei took office and began to conduct the most extensive liberalising reforms in the history of Argentina since the 1990s. His administration drastically reduced economic regulations and controls, subsidies, and government employment and spending, in turn greatly reducing the government's budget deficit and price inflation. Economic growth as well as public confidence in the economy and the government also increased significantly during this time. The poverty rate peaked and began to decline significantly, although household budgets remained strained (including by the loss of some government benefits) and confidence in the job market stayed generally poor.
Background In late 2019, then President Mauricio Macri reinstated exchange controls previously abolished earlier in his term to curb increasing inflation. In June 2020, the Peronist government introduced strict rent controls. Although this maintained prices somewhat stable in the short term, rents surged two years later as the supply of rental housing faltered. By September 2023 the supply of rental homes had reduced by 80% when compared to 2015. In 2021, the government implemented capital controls and tightened the currency, leading to two diverging exchange rates: the official and the parallel exchange rate. The official exchange rate is a government-controlled rate often used in official economic measures and statistics, while the parallel exchange rate reflects the true value of the currency, often significantly differing due to government restrictions or economic instability.
By 2023, official poverty stood at 41.7%, but independent estimates placed it closer to 49.5%."El ODSA UCA estima aumentos elevados de la pobreza y la indigencia" from AICA
Informal work has long been a structural problem in Argentina. These workers are not registered with social security and therefore not covered by labour legislation or institutions, healthcare, job protections and health insurance. Extensive labour regulations and protections, as well as a high tax burden raise the cost of hiring workers and make formal hiring risky. This results in firms hiring informally to save on taxes and compliance costs. Informal work undermines productivity and income growth because informal firms are smaller, less productive, and less likely to invest in technology or training."Expanding Social Protection and Addressing Informality in Latin America" from OECD In 2005, informal employment represented ~55% of the total workforce."Informality and labour market segmentation: the case of Argentina" from CEPAL review In 2025 this figure decreased modestly to 42%."Informal employment rises to 42%, affecting 4 in 10 workers in Argentina" from Buenos Aires Times
Inflation had risen from 2.4% per month in 2022 to a peak of 25% per month in December 2023, propelling the nation into hyperinflation. This hyperinflation eroded the purchasing power of the Argentine peso, rendering wages insufficient to meet basic living expenses. Wages, along with purchasing power in Argentina began falling in October 2023, before Milei was elected and inaugurated as president. By the start of his presidency, real wages fell by more than 20%."Labour Monitor" By UFM"Falling wages: 12 years of lost purchasing power in Argentina" By Buenos Aires Times Over the last 123 years, Argentina has recorded a budget deficit in 113 of them. The resultant economic instability eroded public trust in the government's ability to manage the economy, prompting widespread protests and calls for urgent reform. The situation reached a tipping point, setting the stage for Milei's election and his subsequent implementation of radical economic reforms aimed at reversing the country's economic decline."Why Javier Milei is today's most exciting politician" From The Australian Lucas Romero, the head of Synopsis, a local political consulting firm and Andrei Roman, CEO of Brazil-based pollster Atlas Intel believe that Javier Milei's victory in the 2023 elections was not necessarily a result of popular approval of his ideas but rather stemmed from widespread dissatisfaction with the political establishment, which had been strongly left-wing in its economic approach. The people thus wanted change.
According to the UFM, Milei inherited a repressive tax system with a tax burden of more than 30% to GDP, and a 60% public debt to GDP." Fiscal Monitor" From UFM
Milei's decisions 2024 During his campaign and throughout his presidency, Javier Milei has said several times that the reforms he plans to enact are "painful", but "necessary", contending that it's the only way. "There is no alternative to a shock adjustment,” Milei said during his inauguration. “There is no money.”"Argentina’s Javier Milei tells nation to brace for painful economic shock" from Aljazeera In his first year as Argentina's president (since December 2023), Javier Milei prioritized inflation reduction as the overriding goal of his economic agenda; all other policies were subordinated to this urgent mission."One year of Javier Milei's economic policy" By Freiheit 2 days after being inaugurated, he cut the number of ministry and secretariat positions by 50%, and public officials by 34%."Milei’s government reduces ministries and secretariats by 50%" From Buenos Aires Herald
During Milei's presidency, his reforms and bills have been repeatedly contested by the established parties in the Argentine congress due to Milei's party being in the minority. The peronist opposition parties in particular rallied heavily against his bills, as Milei's proposed policies were antithetical to their beliefs of equality. In June 2024, Milei was able to pass his tax and 'omnibus' bill. The bill, aimed at deregulating and reforming several sectors and state owned enterprises in Argentina, also included reforms concerning labour, commerce and real estate and various social programmes such as healthcare. Months of backlash led towards the number of articles reducing from over 600 to 232. During the vote and deliberations, some articles, such as the privatization of the state owned airlines were also rejected. Eventually, following an 11-hour debate and after a 36–36 tie, Vice President Victoria Villarruel, the head of the chamber, cast the decisive vote."Argentina Senate approves reform bills in major victory for President Milei" From France24
In October 2024, Milei shut down AFIP, the Argentine tax agency. According to Bloomberg Línea, 80 percent of AFIP's 2024 budget was allocated for salary payments. Milei achieved a budget surplus within the first few months in office by substantially downsizing government structure, reducing government spending by 30% by the end of the year."Deregulation in Argentina: Milei Takes “Deep Chainsaw” to Bureaucracy and Red Tape" From the Cato Institute"Milei is taking a chainsaw to the state" From El Pais This led to 9.6% of all federal employees (approximately 52,000) being laid off, saving the government approximately 2.1 billion."Milei's government has already laid off more than 52,000 public employees." From La Derecha Diario"Milei has cut 48,000 public-sector jobs since taking office" From Buenos Aires Times The ministry of infrastructure, secretariat of science & technology, and the secretariat of education in particular saw most or almost all of their funding disappear, along with major cuts to the pension fund, where the Argentine pensioner of the lowest income bracket only receiving 320 dollars a month, slightly more than a third of what the average household needs to survive. The funding for the office of the Presidency was also cut by 13.3%, whilst the Argentine intelligence agency saw a 215.9% increase in their budget."Milei is taking a chainsaw to the state" from El pais The reforms have contributed towards macroeconomic stability but were accompanied by social unrest."Argentina investors bet on Milei's popularity a year after his election" from Reuters At the end of the year, real wage growth had outpaced inflation for the first time in 4 years."Argentina's Salaries Outpace Inflation with 145.5% Growth in 2024" from The Rio Times
Javier Milei's economic stabilization plan, launched upon his inauguration in December 2023, sought to resolve Argentina's chronic inflation, fiscal deficits, and dual exchange rate distortions through a phased program of monetary and fiscal tightening. It introduced a hybrid exchange regime with maintaining an official rate for key transactions while allowing a market-determined rate to operate with the end goal to unify the two exchange rates gradually. The strategy combined strict control of the money supply, high interest rates, and credit restrictions with sustained fiscal consolidation via spending cuts and subsidy reform. Among Milei's first actions was a 50 percent peso devaluation to narrow the gap between official and parallel rates, followed by a policy of gradual 2 percent monthly devaluation to stabilize the currency and rebuild investor confidence."The Argentine Stabilisation Plan: A Complex Work of Monetary and Exchange-Rate Engineering" From Real Instituto Elcano"Argentina peso: Milei begins 'shock therapy' by devaluing currency" By BBC The goal was to stabilize the economy, restore purchasing power, and enable sustainable growth while reducing the social and economic harm caused by past cycles of inflation and currency problems."Milei 2025: Between Argentina’s Mid-Term Elections and IMF" From Peterson Institute for International Economics
President Javier Milei's government moved to dismantle Argentina's decade-long capital and currency controls, known as the cepo, which had restricted access to foreign exchange and deterred investment. Enabled by a $20 billion IMF bailout with $12 billion disbursed immediately. The reform replaced the fixed currency peg with a managed-float system, allowing the peso to trade within a band of 1,000–1,400 per U.S. dollar. The measures also lifted limits on dollar purchases and permitted firms to repatriate profits. Economists regarded the policy as a major step toward market normalization and macroeconomic stabilization, while warning that its success would depend on sustained investor confidence and the management of austerity's social impact."Argentina secures IMF loan and ends most capital controls in key milestones for President Milei" From PBS News"Argentina lifts currency controls after IMF bailout" From AP News"Argentina eases FX controls in major policy shift ahead of IMF deal" From Reuters
2025 In 2025, the administration of Javier Milei continued his economic reform programme. An element of Milei's 2025 reforms was Argentina's engagement with international financial institutions. In April, the government reached a US$20 billion Extended Fund Facility agreement with the International Monetary Fund, designed to support the country's fiscal consolidation and structural reform programme. This arrangement stipulated the maintenance of fiscal anchors, progress toward greater exchange‑rate flexibility, and commitments to liberalize the capital account. Under the programme, many of Argentina's longstanding foreign‑exchange controls were relaxed, enabling firms to repatriate profits, conduct foreign trade transactions more freely, and access FX markets without the restrictive limitations that had previously characterized the system. The government progressively dismantled the dual or multiple exchange-rate regime, replacing it with a unified and gradually adjustable exchange rate, thereby signaling a commitment to market-based currency management and external financial stability."IMF reaches deal with Argentina on $20 billion bailout" from Politico The loan is to be used for rebuilding the central bank's foreign reserves in order to aid the currency."The three-phase plan that reshaped Argentina" from DpaInvestments