ANTI-INFLATION POLICY OF THE MILEI GOVERNMENT IN ARGENTINA: CURRENT RESULTS AND PROSPECTS
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Abstract
Introduction. Argentina represents a unique case in global economic history - a country that ranked among the world's ten wealthiest nations at the beginning of the 20th century but experienced numerous episodes of hyperinflation, defaults, and currency crises over subsequent decades. By late 2023, Argentina faced another hyperinflationary crisis: annual inflation reached 211.4%, monthly inflation in December stood at 25.5%, and the poverty rate exceeded 40% of the population. In these circumstances, Javier Milei - a libertarian economist who promised radical transformation of the economic system through "shock therapy" and strict fiscal consolidation - won the presidential elections.
Purpose. The purpose of this article is to analyze the anti-inflation policy of the Javier Milei government in Argentina in 2024-2025, evaluate its current results, and determine the prospects for sustainable macroeconomic stabilization.
Methods. The research employs methods of comparative analysis, statistical analysis of macroeconomic indicators, and case-study methodology. The information base consists of official data from Argentina's National Institute of Statistics and Censuses (INDEC), reports from the Central Bank of Argentina (BCRA), IMF, OECD, BIS, and academic publications.
Results. The central element of Milei's economic strategy was an unprecedented fiscal consolidation: public spending was reduced by approximately one-third in real terms in 2024; half of ministries were eliminated along with over 40,000 civil service positions; subsidies for electricity, gas, and public transport were terminated, leading to sharp tariff increases; transfers to provinces were frozen. As a result, Argentina achieved its first sustained budget surplus in over 14 years. Monthly inflation decreased from a peak of 25.5% in December 2023 to 2.1-2.5% in the second half of 2025 - more than a tenfold reduction. Annual inflation fell from 211.4% to 31.4% - the lowest annual rate since July 2018. In April 2025, the IMF Executive Board approved a new 48-month Extended Fund Facility program worth $20 billion - the 23rd IMF program in Argentina's history. The poverty rate, which had peaked at 52.9% in the first half of 2024, decreased to 31.6% in the first half of 2025 - the lowest level since 2018. This means that over 8 million Argentines have been lifted out of poverty within a year of the peak.
Originality. For the first time, a comprehensive analysis of the current stage of economic reforms in Argentina under the Milei government has been conducted using the latest data from 2025. The mechanisms for achieving record-low monthly inflation indicators and their relationship with fiscal consolidation have been identified. The study confirms the theoretical conclusions of T. Sargent, N. Wallace, and other researchers regarding the critical role of fiscal discipline in overcoming chronic inflation under conditions of fiscal dominance.
Conclusion. The economic policy of the Javier Milei government represents the most ambitious attempt at macroeconomic stabilization in Argentina's modern history. In less than two years, the government has achieved: reduction of monthly inflation from 25.5% to 2-2.5%; reduction of annual inflation from 211.4% to 31.4%; the first sustainable budget surplus in over 14 years; reduction of poverty from a peak of 52.9% to 31.6%; attraction of unprecedented international financial support totaling over $42 billion. The Argentine experience demonstrates both the high social cost of "shock therapy" at the initial stage and the possibility of rapid recovery of social indicators with consistent implementation of stabilization policies. Long-term sustainability of achievements will depend on the government's ability to implement structural reforms to increase economic productivity, successfully transition to a sustainable exchange rate regime, and maintain political support.
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