Javier Milei on GDP Inflation
Javier Milei considers runaway inflation the foremost issue dominating contemporary Argentine politics, which he contends has spiraled out of control due to decades of economic mismanagement, largely attributed to the Peronist establishment.
As President, his main objective has been to aggressively combat this situation through anti-inflationary economic policies, specifically a program of shock therapy involving deep spending cuts and deregulation to stop the deterioration.
Milei's administration has pointed to significant success, with annual inflation sharply decreasing from near 300% during his initial months to much lower figures by 2025, though this has coincided with initial GDP contraction and societal consequences from austerity.
Context
Inflation has been a persistent feature of the Argentine economy, and Javier Milei has built his political brand as a vocal critic of the policies that sustain it. His economic philosophy, rooted in the Austrian School of economics, directly rejects fiscal expansion and monetary accommodation as the causes of inflation.
His proposed overhaul includes eliminating the Central Bank of Argentina, which he views as the entity responsible for the 'inflation tax,' making the fight against inflation central to his entire political platform and presidential mandate.
Timeline
- Began presidency with annual inflation near 254.2% and warned of an economic shock necessary to fix financial woes.
- Annual inflation peaked at 300% under his administration despite initial austerity measures.
- Reported that monthly inflation reached a five-year low of 2.2%, indicating the 'shock' was taking effect.
- Annual inflation rate came in at 39.4%, and monthly inflation reached a 5-year low of 1.5%.
Actions Taken
- Economic policy implementationImplemented 'shock therapy' economic measures, including drastic government spending cuts and deregulation, as his primary tool to stop inflation from getting worse.
- Fiscal reformReduced government spending by 30% and laid off approximately 52,000 federal employees in an effort to achieve a fiscal surplus and curb monetary emission fueling inflation.
- Fiscal outcomeAchieved a budget surplus for six consecutive months, which is necessary to stabilize the currency and halt the inflationary cycle, according to his administration.
Criticism
While the government reported poverty reduction alongside inflation control, UCA disputed the magnitude of the reduction, suggesting consumption rate adjustments and rising healthcare costs tempered the relief.
Sources7
- Inflation was the foremost largest issue dominating contemporary Argentine politics, as it spiraled out of control during and for some time after the elections of 2023.
- Milei took office as president on 10 December 2023, amidst a lack of support in Congress, an annual inflation rate approaching 200%, rising poverty, and a polarized population as challenges for his presidency.
- Annual inflation stood at 254.2% in the first month of Milei's term, and reached a peak of 300% in May 2024.
- In 2024, under President Javier Milei, Argentina saw major economic changes, focusing on austerity, deregulation, and reducing government spending. The most pressing issue for Milei was hyperinflation.
- Inflation dropped from 300% in May 2024 to 55.9% in March 2025, the lowest level in over three years, with monthly inflation hitting a five-year low of 2.2% in January.
- Annual inflation rate came in at 39.4% in July 2025. On the same month, monthly inflation reached a 5-year low of 1.5%.
- He has done more good than many people expected... But, sometimes, to change things, you need somebody that’s a little bit of a fanatic to really move the needle. And he has done it.
* This is not an exhaustive list of sources.