Javier Milei’s victory in 2023 was driven by deep voter fatigue with the traditional formulas represented by Kirchnerism. After years of state control, chronic inflation, recurring recessions, and unfulfilled promises, much of the population — including young people and urban middle classes — sought a radical alternative. With an aggressive, anti-establishment, and ultraliberal rhetoric, Milei channeled this discontent into a decisive victory, promising to “blow up” the structures of the State and restore economic freedom to Argentines.
1. From Populism to Austerity: The Chainsaw Shift
Javier Milei’s arrival to the presidency was marked by an unprecedented legislative and executive offensive. Through Decree of Necessity and Urgency (DNU) 70/2023 and the “Bases and Starting Points for the Freedom of Argentines” Bill (Ley Bases), the government presented over 300 measures aimed at broad deregulation, deep public spending cuts, and market liberalization.
The rhetoric of the “chainsaw” — the symbol of his reforms — materialized in actions designed to eliminate state privileges and shrink the public sector, but also generated intense social resistance, particularly from unions and civil organizations.
Despite political and social conflict, macroeconomic results began to emerge. Monthly inflation fell from 25.5% in December 2023 to 11.0% in March and 2.8% in April 2025. The annual projection is 31.8% for 2025, marking a sharp deceleration. Fiscal consolidation was aggressive: the primary deficit of 5% of GDP in 2023 turned into a 0.6% surplus in 2024.
This reversal came with severe cuts: pensions fell 16.4% in real terms, public wages 14.5%, and infrastructure investments dropped 77.2%. Economic activity suffered — the country entered a recession (-3% in 2024) — but with a 5% growth forecast for 2025.
2. Déjà Vu with the IMF: Changing Everything Without Changing That Much
With inflation falling, fiscal surplus achieved, and a strong anti-interventionist discourse, Milei began to be celebrated by media and investors as a symbol of a new Argentina. The highlight came with a new US$20 billion IMF loan (US$12 billion disbursed upfront), which helped rebuild international reserves — negative in 2023, now at US$36.8 billion.
However, there is an undeniable paradox: despite his anti-system rhetoric, Milei turned to the same institution and the same kind of external debt that previous governments — including left-wing ones — had used without lasting success. Argentina, after all, is the country with the highest number of sovereign defaults in modern history, according to data from Credit Suisse and the World Bank.
Recurring reliance on the IMF has never proved to be a “silver bullet”, and in light of recent history, there is reason for caution regarding the sustainability of this new cycle.
3. Soy, Lithium, and LNG: Solid Ground Amid Instability
Even amid the liberal shock, the traditional pillars of the Argentine economy remain relevant. In agribusiness, Argentina stands out for soybeans, corn, and beef — exporting grains to China and soybean meal to the European Union. In energy, unconventional oil exploration in Vaca Muerta and the opening for LNG exports have created new opportunities.
In the mining sector, lithium has put the country on the map of the global energy transition. And in the digital economy, Mercado Libre remains a regional success story, with Mercado Pago promoting financial inclusion.
However, cuts to science, universities, and innovation funding are concerning — the brain drain could jeopardize the country’s technological future.
Support for Milei’s economic plan came not only from the IMF, but also from Washington. The visit of U.S. Treasury Secretary Scott Bessent to Buenos Aires, with statements of “full support” for Milei’s reforms and a promise to make the U.S. Argentina’s “preferred partner,” sealed a geopolitical alignment.
Adding to this, Starlink was authorized to operate in Argentina, and there are rumors of a potential Tesla factory. Milei has also been perceived as a key ideological ally of international conservatism, especially aligned with President Donald Trump.
Curiously, during Trump’s “Liberation Day” — an event where new tariffs on rival trading partners were announced — Argentina was included among the countries taxed at 10%, the same rate applied to Brazil, which does not share the same ideological alignment with the U.S.
This paradox highlighted that, although Milei has explicitly courted Washington and promoted pro-market reforms, the tangible commercial recognition remains limited. It raises doubts about the real return of this diplomatic realignment and how much Argentina truly gains from placing all its bets on a single strategic partner.
4. Who Owns Argentina’s Future?
Although Javier Milei has managed to reverse key macroeconomic indicators in record time, Argentina’s future remains deeply uncertain. The reliance on decrees, growing social fragility, and the recurrence of old solutions — such as IMF borrowing — cast doubt on the long-term sustainability of this new cycle.
For investors, the current moment favors a selective approach: extractive and primary sectors such as energy, oil, gas, and agribusiness appear to be safer bets, anchored in real assets, stable external demand, and lower exposure to institutional turbulence.
Meanwhile, industrial and technology-intensive sectors, which depend on regulatory stability and innovation investment, may continue to face higher risks in a country still seeking its new equilibrium.
In an environment of economic transition and institutional uncertainty, rely on Trust Insight to gain fast, verified access to professionals with practical and up-to-date knowledge, facilitating decision-making in acquisitions, restructurings, business expansion, and market assessments in our key neighboring country.