Today marks exactly one year since Javier Milei became president in Argentina. Expectations among libertarians were high, as this was the first time a self-proclaimed “anarcho-capitalist” had been elected to the highest office anywhere in the world. During his first year, Argentina has certainly experienced changes. The country is not an anarcho-capitalist paradise, but it is certainly more deregulated and has more austere governance than in the past.
The vehemence with which Argentina balanced its budget was indeed unexpected. Milei inherited a deficit of 5% of GDP, but achieved a financial surplus in the first quarter of his government has held up ever since. The cuts have mainly targeted retirees and civil servants, leading some to question their sustainability. But in a country whose budget was out of balance 113 of the past 123 yearsBalancing the budget so quickly is by far Milei’s greatest achievement.
The sudden stop of money printing and the expectation that Argentina will remain on its current fiscal stance caused the crisis peso to appreciate (after many years of depreciation) and to reduce inflation. The monthly inflation rate for December last year was 25%but the last available figure was 2.7% in October. Although the government aims for much lower inflation in the future, this is the lowest monthly value since November 2021. During 2023, Argentina had the highest inflation rate in the world, at 211%the highest since the country’s 1989-1990 period hyperinflation. All this now seems like history. The country has stabilized.
At the same time, Milei has created a new Ministry for Deregulation, charged with deregulating the Argentine economy as much as possible. Through the use of executive orders and extraordinary powers delegated by Congress, the government has already implemented several measures that introduce competition into previously closed markets. Examples range from rent discouragement, which has occurred causes the supply of available apartments will almost triple and real prices will fall by as much as 40% authorization of new satellite internet companies, the arrival of which is expected to revolutionize agriculture through increased use of technology. Argentina currently ranks 148th in regulation according to the Fraser Institute World Economic Freedom Index.
So what about all that is not economic policy? Argentina’s first libertarian president has made no significant changes in the area of personal freedoms, although the country already scores relatively high in that area according to figures from the Cato Institute. Index of Human Freedom. In any case, state media companies have stopped broadcasting left-wing propaganda and the Milei government has closed its anti-discrimination agency, citing its misuse for political purposes.
Of course, there are still countless challenges for Milei. Currency controls are still active and Argentina is unlikely to receive major investment while they are in place, despite the government has started offering benefits for projects over $200 million. Argentina is also still far from trade liberalization, despite Milei has been reduced some rates. So far, no state-owned companies have been privatized and taxes are still as high as when Milei came to power. But the government is aware of all these challenges and will likely try to implement reforms at some point, perhaps after the 2025 midterm elections. Without these reforms, it will be difficult to reduce poverty, which is currently the case at 53%consistently.
Despite the implementation of perhaps Argentina’s largest-ever budget adjustment, Milei is not only still popular, but appears to be growing in popularity over time. According to the latest poll According to the Universidad de San Andrés, 54% of Argentinians view him favorably. He is also trusted by the markets, hence the Argentine sovereign risk premium went down by almost two-thirds in 2024, to the lowest level in five years.
Ironically, many expected Milei to remain in power for only a few months or even weeks. Sergio Massa, his main opponent in the 2023 presidential race, had so much confidence in it that Milei would not succeed that he wrote a book to justify himself, which he wanted to present in March. However, its release has been delayed month after month as Milei’s popularity continues. If things remain as they are, that book may never see the light of day.
Marcos Falcone is the project manager of Fundación Libertad and a regular contributor to Forbes Argentina. His articles have appeared in The Washington Post, National Review, and Reason, among others. He is based in Buenos Aires, Argentina.