Argentina: 100 Days of Milei

Written by Joseph Cain | March 25, 2024

Javier Milei

In the past week, Argentine President Javier Milei marked his 100^th day in office since being sworn in on December 10^th, 2023. He inherited an economy in shambles after years of populist Peronist policies pushed by his predecessors, Alberto Fernandez and Christina Kirchner, that fueled inflation due to the government overspending.  He has attempted to address the economic crisis in Argentina by instituting shock therapy measures and cutting government spending by initially devaluing the Argentine Peso by 54%, removing price controls, fuel, and transport subsidies, eliminating 50,000 public jobs, suspending all new public work contracts, and slashing the federal bureaucracy in half. However, these measures have been painful to large swathes of the Argentine population, especially the poorest. According to a study conducted by the Catholic University of Argentina, 57.4% of the 46 million Argentines lived in poverty as of January—a 20-year high partially caused by the devaluation of the peso. 

Still, the Milei administration posted the first budget surplus in a decade. It has also improved its relationship with the International Monetary Fund (IMF), with whom Argentina has a $44 billion credit program. Furthermore, in efforts to stabilize public finance, the Central Bank has purchased roughly $10 billion in foreign currency to erase its deep net reserves deficit, since Milei took power, according to calculations made by Reuters. Net reserves are still negative, coming at approximately -$1.5 billion. 

It is almost certain that the Milei administration will continue its policies of austerity, to transform Argentina’s economy after years of mismanagement by the Peronists, but it will not come without financial struggle for the Argentine populace. Milei will almost certainly face continued political struggles in his efforts to stabilize the economy through legislation because his party lacks majorities in the Argentine legislature — his party holds 40 of the 257 seats in the Chamber of Deputies and seven of the 72 seats in the Senate. Unless he can build a coalition in the legislature, Milei will likely rely on emergency executive orders to achieve his government’s vision.