Mileis economic miracle: Argentina on the upswing despite crises!

Mileis economic miracle: Argentina on the upswing despite crises!

Javier Milei, the president of Argentina, has made a name for himself with his libertarian reforms intended to stimulate the Argentine economy. Despite reports of police violence and social tensions, the economic situation is assessed increasingly optimistically. This reports Mercury, with industry associations and financial markets reacting positively to the developments.

Since Milei took office, the government has dismantled exchange controls and import taxes and reduced bureaucratic hurdles, attracting global attention. German companies are showing increasing interest, particularly in areas such as lithium, copper and green hydrogen. Small and medium-sized companies have also recognized potential in Argentina and are ready to invest.

Economy and debt

Inflation in Argentina is showing signs of stabilizing, a fact seen by the International Monetary Fund (IMF) as a sign of confidence in the government. The poverty rate has fallen to 38% from 53% in mid-2024, although there are doubts about the accuracy of these statistics. Argentina remains the IMF's largest debtor, but continues to have access to loans intended to help stabilize economic and monetary conditions. The IMF has granted a major loan, bringing Argentina's total debt to $61 billion, according to reports Böll Foundation.

The subsidies are intended primarily to stabilize the exchange rate and control inflation. However, deep cuts in government spending have weighed on the construction industry and deepened a recession in the manufacturing sector. Unemployment and underemployment remain high while prices for essential goods and services rise.

Social impact and human rights

Despite the financial stability achieved through the IMF loan, there is a decline in support for Milei's administration among the population. Social conflicts and human rights violations remain a key issue addressed by Amnesty International. Reports of repression against protests and attacks on journalists are fueling concerns about democracy in Argentina. There is increasing evidence that political and economic reforms are endangering democratic governance and civil society.

The government has changed its stance on supporting Ukraine and moved more pragmatically towards the US. Further trade relations are being sought, particularly with the USA, but preferential trade status has not yet been achieved. Negotiations with the United States include possible tariff reductions on a selection of products.

outlook

The upcoming parliamentary elections in October 2025 are seen as a crucial test of sentiment for Milei's government. Economic developments in Argentina are being closely monitored internationally, particularly by liberal politicians in Europe. The EU-Mercosur agreement is expected to strengthen trade ties between Europe and Argentina, which could open up new economic opportunities for the country.

Overall, the next few months will be dominated by crucial reforms as Argentina's government under Javier Milei continues to struggle to find a balance between economic stability and social challenges.