Javier Milei: A New Era in Argentina

“Unlike in the past, the adjustment will fall almost entirely on the state and not on the private sector.” These words, spoken by Javier Milei, sum up a libertarian vision well.

For him, the state must be reduced to the essentials: macroeconomics, security, and foreign relations. With this proposal to reduce the state, he won the elections, becoming the world’s first libertarian president and the most voted in Argentina’s history, with 15 million votes.

On December 10, 2023, when he took office, he found a country in economic collapse. Argentina’s figures were alarming:

• Inflation of more than 25% per month, reaching 211% per year, the highest in the world.
• More than 40% of the population was living in poverty.

This crisis was a true reflection of a long history of interventionist economic policies, exacerbated in recent years by governments that printed money without the necessary backing to cover excessive spending.

Faced with this scenario, the economist proposed a radical approach: eliminate the fiscal deficit, reduce the size of the state, contain hyperinflation, and restore confidence in the Argentine economy.

Just over a year later, the effects of his strategies are beginning to be felt. But how much has Argentina really changed? And what opportunities does this new scenario offer investors, entrepreneurs, and those seeking greater economic freedom?

In this article, we analyze the impact of Javier Milei’s policies and how the new changes could make Argentina an even more attractive destination for those who want to live and do business with less state intervention.

Inflation under control: an Argentine miracle?

If there was one symbol of Argentina’s decline in recent years, it was runaway inflation: 211% annually in 2023, the highest in the world. The Argentine peso was worth less every day, prices doubled in a matter of months, and the population was in a frantic race to get rid of the currency before it depreciated even further.

It is no coincidence that hyperinflation appeared as the biggest concern for Argentines in election polls. That is why, during the campaign, Javier Milei promised that the fight against inflation would be his priority. And, unlike so many politicians, he delivered.

Upon taking office, Milei launched an economic program based on two pillars:

1. Deregulation: reduction of regulations in various economic areas.
2. Bureaucratic reform: reducing the size of the state and simplifying administrative processes.

The main tool for this was the “Ley de Bases” (Basic Law), a package of more than 600 measures, and the Decreto de Necesidad y Urgencia (DNU, Decree of Necessity and Urgency), with some 300 measures to dismantle regulations, cut spending, and unblock the economy.

But without a majority in Congress, he faced strong political resistance.

Even so, ministries were closed, subsidies were eliminated, and spending was cut. After a first failed attempt, Milei managed to pass a reduced version of the “Ley de Bases” in July 2024, which guaranteed some 200 essential measures to sustain the shock economic policy.

And the results came. Inflation began to plummet: from 25.5% in December 2023 to 2.7% in December 2024. By 2024, inflation had fallen to 117.8%, almost 94 points lower than in 2023 (211.4%).

Official inflation in Argentina

Variation (%) compared to the previous month.

Source: G1

What seemed impossible just a few years ago has happened: prices have begun to stabilize and Argentines have finally stopped living under the daily uncertainty of senseless price hikes.

The INDEC will soon publish the first inflation figures for 2025, and many economists are already projecting an even lower figure than in December 2024.

It can be concluded that the Argentine economy is finally leaving behind its worst inflationary crisis in decades. And this leads us to another broader reflection: if Argentina has managed to reverse a historic crisis in such a short time, how far can fiscal discipline take the country?

Bringing the state into line: cuts, privatizations, and reforms that generated a surplus

Although runaway inflation was the most visible symptom of the Argentine crisis, the real problem lay in the structure of the state: a gigantic, deficit-ridden government accustomed to spending far more than it collected.

As a result, spending cuts have had to be aggressive. In the first half of 2024, the Argentine government reduced its spending by 35%, an adjustment that Milei described as “the largest in the history of humanity.” Milei’s logic is simple: if something does not generate value for society, it should be eliminated or privatized.

That is why he has dismantled much of the state apparatus: halving the number of ministries, abolishing agencies such as the National Institute Against Discrimination (INADI) and the state news agency Télam, and cutting more than 30,000 public sector contracts between December 2023 and October 2024, a cut that has meant savings of almost $4 billion.

Alongside this, privatizations began to be implemented, and state-owned companies such as Aerolíneas Argentinas have been put up for sale. Infrastructure projects, previously paid for with public money, will now only be carried out if the private sector finances them. There is no longer any room for pharaonic projects paid for with taxpayers’ money. The mantra “There is no money” has become a reality.

For the first time in 14 years, Argentina has begun to record fiscal surpluses every month.

The primary surplus is a crucial indicator of the country’s fiscal health, showing whether the government is able to pay its bills without having to print money or borrow. Source: UFM

In other words, the government has managed to collect more than it has spent, breaking a cycle of persistent deficits that had lasted for years.

Thus, in 2024, Argentina closed the year with a financial surplus of 1.8% of GDP, something that had not happened since 2010 and represents the best fiscal result in 16 years.

The adjustment is not yet complete, but Argentina now has a smaller state and a more balanced economy, which means that it is a country that is beginning to regain investor confidence.

Decreased country risk: Will the new president restore market confidence?

When he took office, Javier Milei inherited a public debt of more than 60% of GDP, along with a history of defaults and difficulties in paying international commitments, factors that raised the country risk, a key indicator of investor confidence in the government’s ability to meet its obligations.

Most of this financial burden comes from a $44 billion loan from the International Monetary Fund (IMF), signed in 2018 by the government of Mauricio Macri, which is still being renegotiated.

However, the actions implemented in the first year of government began to reverse the negative market perception, which has resulted in a significant drop in country risk, from 1,900 basis points at the beginning of 2024 to less than 600 points in January 2025, the lowest level since 2018.

Source: UFM

This index, calculated by J.P. Morgan, serves as a barometer of a country’s economic stability. The significant reduction indicates that Argentina is now seen as a less uncertain destination for investment and financing, pointing to a more predictable economic environment.

Another reflection of this change has been the appreciation of the S&P Merval index, the main indicator of the Argentine stock market. In 2024, the Merval rose 114.9% in dollars, marking the best overall performance of the year and the highest growth of the index since 2003, when it rose 134.14%.

Source: CNN Brasil

By comparison, the Ibovespa (Brazil) fell 29.92% in dollar terms over the same period, the largest decline since 2015. While foreign investors reduced their exposure to Brazil, Milei’s Argentina attracted capital and gained relevance in international markets.

Optimism has also been reinforced by rating agencies. In January 2025, Moody’s Ratings upgraded Argentina’s credit rating for long-term foreign and local currency issuances, changing its outlook from “stable” to “positive.”

Thanks to renewed confidence and a more predictable business environment, the IMF forecasts that Argentina’s GDP will grow by 5%, making it the largest in South America in 2025 and 2026. If these forecasts materialize, Argentina will become an example of economic recovery in Latin America, breaking with a past of instability and uncertainty.

Tax cuts: less government and more market

The reduction in the size of the state has not only taken the form of spending cuts and privatizations. Argentina’s fiscal policy has also undergone significant changes.

While high taxes discouraged growth and created distortions in the economy, Milei’s government has now activated a program of exemptions, reducing the tax burden on the population and facilitating the flow of capital.

Milei has introduced seven major changes to Argentina’s tax structure, ranging from property and income taxes to import and export tariffs.

Tax reductions and adjustments

• Personal property tax: The government has increased the tax-free threshold from $27 million to $100 million, significantly reducing the taxpayer base for this tax. In addition, rates for the 2023 fiscal year have been reduced to a range of 0.5% to 1.5%, with a special benefit of 0.45% for those who choose to pay five years in advance.
• Income tax: The fourth category of income tax has been reinstated, making it more progressive. The non-taxable minimum has also been raised, ensuring that fewer Argentines will have to pay income tax.
• Import tariffs: The government has cut tariffs on 89 essential products, reducing costs for businesses and consumers. Among the main cuts, tires went from 35% to 16%, and small appliances went from 35% to 20%.
• Imports for small consumers: The limit for international purchases has been increased from $1,000 to $3,000, making it easier to access foreign products without the traditional bureaucracy. In addition, purchases of up to $400 are now exempt from import taxes, so only VAT is payable.
• End of the PAIS tax: The government has not renewed the PAIS tax, a levy that made dollar transactions more expensive and had a direct impact on international products and services, such as subscriptions to Netflix, Spotify, and other streaming platforms. With this measure, the savings dollar and the card dollar have become cheaper, reducing costs for those who consume or invest abroad.
• Export duties (withholdings): A temporary reduction in withholdings on agricultural products has been established, with a direct impact on products such as soybeans, wheat, corn, sunflowers, and their derivatives. The measure is valid until June 30, 2025.
• Taxes on cars and motorcycles: To boost the automotive sector, the government has reduced taxes on vehicles, leading to an estimated 15% to 20% drop in sales prices. Incentives have also been granted for the import of electric and hybrid vehicles, facilitating access to new technologies and promoting the renewal of the national fleet.

According to Milei, the plan for 2025 includes a 90% reduction in federal taxes, which will make Argentina the most attractive country in Latin America for business and investment.

He also wants to restore the fiscal autonomy that the provinces have lost over the years, decentralizing tax collection and giving local governments more freedom to set their own fiscal policies.

This decentralization could put an end to the outdated model of dependence on the federal government, making the system more agile and efficient.

If these reforms move forward, Argentina could leave behind decades of statism and become a center of economic freedom, attracting entrepreneurs and investors seeking a more predictable fiscal environment that favors growth.

Peso, dollar, and crypto: the future of Argentine currency

Javier Milei came to power promising to destroy the peso, abolish the Central Bank, and dollarize the economy. But how has the Argentine peso become the world’s most valuable currency in 2024?

The answer to this apparent contradiction lies on two fronts: an end to rampant money printing and a drastic reduction in the fiscal deficit.

As a result, and to everyone’s surprise, the Argentine peso has appreciated by 44.2% in real terms, becoming the world’s best-performing currency in 2024, ahead of the Turkish lira, which stood at 21.2%.

The “strong peso” has had mixed effects on the Argentine economy. On the one hand, wages in dollars have increased significantly, with the minimum wage rising from 156,000 to 272,000 pesos in the course of 2024—a nominal jump of 76%.

In dollars, the value rose from $157 to $228, reflecting the appreciation of the local currency. However, this strengthening of the peso has also increased the cost of living and production.

Despite the appreciation of the peso, Milei has not abandoned his dollarization plan. For the time being, the abrupt replacement of the peso has proved unfeasible in the short term, due to the lack of international reserves and the risk of collapse of the banking system.

Endogenous dollarization and the end of exchange rate tension

Without sufficient reserves to dollarize the country overnight, the government has opted for a strategy called “endogenous dollarization,” which allows the market to migrate naturally to the dollar or other currencies. In practice, this means that Argentines can now choose in which currency they want to conduct their transactions, without government impositions.

Among the measures to achieve this are:

• Authorization for establishments to display prices in multiple currencies, including dollars and cryptocurrencies.
• Ease of use of debit cards for foreign currency payments.

While the peso holds steady and the dollar gains ground, cryptocurrencies are advancing as a real alternative to the traditional financial system. Between June 2023 and June 2024, Argentina surpassed Brazil to become the largest cryptocurrency market in Latin America, with a turnover of $91.1 billion compared to Brazil’s $90.3 billion.

The Argentine government legalized Bitcoin (BTC) contracts at the end of 2023 and has already stated that the official adoption of cryptocurrency as legal tender could be on the way. The expectation is that, starting this year, any Argentine will be able to buy, sell, and pay bills in the currency of their choice—whether peso, dollar, or Bitcoin—without state intervention, following the model of El Salvador.

With a monetary landscape in the midst of transformation, it will soon be up to Argentinians to decide which currency to adopt.

No more banking restrictions!

Although this is not something that happened exactly in Javier Milei’s first year, we did not want to leave it out, as it is one of his greatest achievements: the elimination of the bank freeze. But let’s start at the beginning.

The bank freeze or exchange freeze consisted of a set of restrictions imposed by the government to limit the purchase of dollars and other foreign currencies by citizens and companies. They emerged in 2011, under Cristina Kirchner. Their aim was to prevent Argentinians from escaping the government’s plundering, or to put it more nicely: it was to prevent capital flight and protect the Central Bank’s reserves, in a context of high inflation and mistrust in the Argentine peso.

The restrictions imposed a limit on dollar purchases, with individuals only able to buy up to $200 per month on the official market, and often unable to access even that amount due to additional requirements and controls. There were also taxes, such as a 30% surcharge and then another 35%, making access to dollars even more expensive. Companies had an even harder time accessing the precious USD.

But now, in April 2025, President Javier Milei announced the elimination of the currency controls for individuals, allowing the free purchase of dollars through banks and official platforms, without limits or extra taxes. For companies, total liberalization will have to wait a little longer, but the first big step has already been taken and, contrary to what the national and international opposition (the Kirchnerists and socialists of the world) predicted, the Argentine economy in general and, specifically, the currency has not suffered any crisis.

What has this achievement meant for Argentines and investors in general? Well, now anyone can buy dollars on the official market, without monthly limits or additional taxes, using their bank account, so that the black market that had been created for the dollar and other foreign currencies is no longer necessary. This means that Argentines no longer have to live in fear that at any moment the money they have could disappear as if by magic (magic = inflation of the Argentine peso). In the medium term, we hope that the elimination of currency controls will attract investment, facilitate foreign trade, and help stabilize the economy. No small feat!

Security in Argentina: Historic drop in crime rates under Javier Milei’s government

Apart from economic reforms, public security has also undergone significant changes in Milei’s first year in office. In 2024, Argentina recorded its lowest rate of intentional homicides in 25 years.

The figures speak for themselves: the homicide rate fell to 3.8 per 100,000 inhabitants, compared to 4.4 in 2023, representing an 11.5% reduction in the total number of murders. In 2024, there were 1,810 homicides, compared to 2,046 the previous year. With this decline, Argentina has become one of the safest countries in Latin America, second only to El Salvador (1.9 homicides per 100,000 inhabitants).

The most representative case has been the city of Rosario, historically the most violent in the country due to drug trafficking and disputes between criminal factions. In just one year, the number of homicides plummeted by 65%, from 261 murders in 2023 to 90 in 2024.

The government attributes this improvement to policies to combat organized crime, increased police presence, and tougher operations. By way of comparison, Brazil has 19 homicides per 100,000 inhabitants, almost five times more than Argentina.

With this historic reduction in violence, Argentina is strengthening its position as an increasingly safe destination for both its own citizens and foreigners who want to live and invest in the country.

The figures show that the fight against crime follows the same logic as Milei’s economic policy: less tolerance for abuse, more effective results.

Unemployment and poverty: the truth the media doesn’t tell

From his first day in the Casa Rosada, Javier Milei made it clear that he would not make empty promises of immediate prosperity. He warned that measures to rebalance the economy would come at a cost and that Argentina would go through a period of painful adjustments before reaping the rewards of stability.

While the press insisted on the narrative of a “catastrophic increase in poverty,” the reality is that the social crisis already existed even before Milei took office.

When he became president, poverty in Argentina already exceeded 40%, a legacy of a country broken by excessive state interventionism and public spending.

In the first months of fiscal adjustment, poverty rates exceeded 50%, a temporary reflection of the correction of distortions that had accumulated over decades. But contrary to what many predicted, the situation has begun to reverse.

The figures show a significant improvement. Poverty, which reached 55%, has now fallen to around 39%, better than when Milei took office.

With fiscal adjustment underway, inflation under control, and the dollar stabilized, the population is beginning to feel the first signs of recovery.

Likewise, the proportion of the population in employment is increasing, despite cuts in the number of civil servants.

Source: INDEC

The private sector is beginning to absorb this labor force, and the labor market is showing signs of recovery without relying on the state for support.

Milei’s approval rating: The Libertarian stands firm

Source: infobae.com

Since taking office, Javier Milei has faced criticism, predictions of collapse, and bets that he would not make it to the end of his first year in office.

Comparisons with the 2001-2002 crisis, when Argentina had five presidents in one year, were recurrent. Some analysts said his government would lead the country into a new hyperinflation like that of 1989, when prices skyrocketed 3,079% annually. But a year later, these catastrophic scenarios have simply vanished.

On the contrary, he has survived and consolidated his popularity. Elected in the second round with 56% of the vote, the Argentine president now enjoys an approval rating of over 60%, according to Morning Consult.

In January 2025, the same poll showed Milei as the third most popular world leader, with 65% support, surpassed only by Indian Prime Minister Narendra Modi (75%) and Mexico’s newly elected president, Claudia Sheinbaum (66%).

What explains Milei’s popularity?

His predecessors, Alberto Fernández, Mauricio Macri, and Cristina Kirchner, saw their approval ratings fall rapidly as political wear and tear accumulated. Milei, on the other hand, has retained his solid base. The reason? Staying firm.

Many expected that, faced with difficulties, Milei would abandon his economic shock policy and resort to populist measures to appease public opinion. Instead, he did not back down, reduced inflation to just over 2% per month, stabilized the dollar, and began to reverse the fiscal crisis.

Argentina with Milei: A new horizon for those seeking freedom

Today’s Argentina is no longer the same country mired in inflation, bureaucracy, and cyclical crises. In just one year, the profound reforms implemented by the world’s first libertarian president have begun to show concrete results: inflation has plummeted, the fiscal surplus has become a reality, the economy has shown signs of recovery, and security has reached historic levels.

With a government that is reducing state interference, cutting red tape and seeking a more favorable environment for entrepreneurs and investors, Argentina is beginning to become a viable option for those who want more freedom, lower taxes and new opportunities.

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