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Sweeping into power on an ultraconservative social platform and a libertarian economic platform, Milei’s victory in the 2023 elections was hailed as a victory for neoliberal economics worldwide. Promising a new age for Argentina, he committed to take a ‘chainsaw’ to a ‘swollen state’.
However, two years into his presidency, the economic picture remains stark, but hopeful. Inflation has fallen dramatically, going from a whopping 211% inflation pre-Milei to a 31.3% rate as of October 2025, a steep decline. The fiscal deficit has also been erased for the first time in a century, and the markets have rewarded Milei’s new-found economic order with bursts of enthusiasm.
But this has come at an extreme short-term social cost, with a massive cutback in standard of living for ordinary Argentines as they are forced to endure the pain of his reform agenda. The success of Milei’s economic agenda depends on whether the Argentines are willing to endure a huge amount of pain for long-term economic stability. The picture remains unclear but promising as to the extent to which these reforms will translate into broad political stability and an economic consensus.
It is certainly questionable how this can survive politically.
While Milei’s midterm electoral success boosted his party’s representation from 15% to nearly 40% in the Chamber of Deputies (the lower house in the Argentinian Parliament), it has given him some momentum by granting him a mandate to pursue his policies. While his coalition still only commands a minority the President is therefore forced to rely upon opposition lawmakers to get his agenda passed. To make matters even more complicated, these hostile opposition lawmakers have frequently overridden his presidential vetoes on cuts to social programs and public-sector budgets, making it especially difficult for him to secure a consensus due to these political tensions. To keep the fragile political coalition together, he must appease the libertarian, populist part of his base, eager to see him slash spending while also appeasing the soft-right parties within his coalition, who are more hesitant to enact economic policies that could lead to more short-term poverty if it also brought the possibility of defeat at the next election. This requires an extremely careful balancing act by the President, with a risk of aggravating both sides and splitting his electoral coalition, especially as the social cost of the heavy austerity begins to pile up.
Still, Milei must deliver on his priorities. To do so, he must alter the exchange-rate program to let the peso float. Most economists believe to be still overvalued, allowing the market to correct its value could entrench his economic reforms to ensure institutional stability and continue correcting the foundations of Argentina’s unstable economic situation.
Now Milei faces the unenviable task of deepening these reforms, while navigating the social consequences of the ‘chainsaw’ and managing the political environment. If he fails, Argentina risks falling into the chronic crises that till recently seemed to dominate the Argentine’s national debate.
Edited By Phineas Horan
President of Argentina Javier Milei speaking at the 2025 Conservative Political Action Conference (CPAC) at the Gaylord National Resort & Convention Center in National Harbor, Maryland, By Gage Skidmore // CC BY-SA 2.0.
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