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BUENOS AIRES, Argentina (Haiti Wire) — In his first year as president, Javier Milei has made bold moves to stabilize Argentina’s battered economy, achieving significant macroeconomic milestones. However, the social costs of his policies, including a sharp rise in poverty and public discontent, have cast a shadow over his administration’s successes.
Economic Milestones
Milei’s administration has focused on aggressive fiscal reforms to address long-standing economic challenges. Inflation, which reached a staggering 25.5% per month when he took office in December 2023, has dropped to 2.7% in October 2024, the lowest in three years. The fiscal deficit has been eliminated, and the Central Bank’s balance sheet has improved, with reserves replenished and public credit restored.
Key measures include slashing public spending, reducing subsidies for energy and transportation, and cutting thousands of public sector jobs. The government has also implemented deregulation policies in sectors such as energy and private healthcare, while a program for asset regularization injected $15 billion into the banking system.
The Social Cost of Reform
Despite these achievements, the economic adjustments have disproportionately impacted Argentina’s middle and lower-income populations. Poverty surged from 40% to over 50% in Milei’s first year, with seven in 10 children now living in poverty. Pension cuts averaging 17.5% and reduced subsidies have exacerbated the economic strain on vulnerable groups. Consumption has plummeted, with October alone showing a 20% year-over-year decline, while GDP is projected to contract by 2.5%–3.2% for the year.
Public discontent is widespread. Protests have erupted across the country, and critics argue the government’s austerity measures have deepened inequality, leaving many struggling to afford basic goods.
A Divisive Leadership Style
Milei’s presidency has been marked by an unconventional and often polarizing leadership style. Known for his confrontational rhetoric on social media and in public speeches, the far-right leader has targeted political opponents, journalists, and academics, fostering political divisions.
His administration’s reliance on executive decrees to bypass Congress has drawn criticism for undermining democratic processes. Additionally, his failure to secure appointments to Argentina’s Supreme Court and accusations of limiting access to public information have raised concerns about institutional transparency.
International Reception and Domestic Challenges
Internationally, Milei has aligned closely with the United States and Israel, earning praise from global investors. Institutions like the International Monetary Fund (IMF) have applauded his efforts, predicting inflation could drop to 45% in 2025. However, domestic critics warn that the administration’s policies risk stifling long-term growth by reducing investment in education, research, and infrastructure.
Milei insists the sacrifices are necessary for sustainable recovery and has promised economic growth in 2025. However, the rising poverty rate and growing inequality present critical challenges for his administration. Analysts suggest that maintaining public support will require balancing economic stability with tangible improvements in living standards.
As Milei approaches his second year, the test of his leadership will be whether Argentina’s fragile recovery can benefit all its citizens or whether his presidency will deepen existing divides.
