Inflation has collapsed, and that single change has fed other positive things.
Three years into Javier Milei's presidency, Argentina has emerged from one of its most acute economic crises with inflation reduced from 211% to 34%, exports approaching $9 billion monthly, and GDP growing at 4.4% — figures that challenge the warnings of over a hundred economists who predicted ruin. The transformation was purchased through painful austerity: severed subsidies, dismantled ministries, currency reform, and a reopening to global capital markets that had long turned away from Buenos Aires. History has not yet rendered its final verdict, but the arc of Argentina's recovery invites a reckoning with what we believe we know about the limits and possibilities of radical economic change.
- Argentina inherited a 211% inflation rate and a collapsing economy in December 2023, with a coalition of world economists — including Thomas Piketty — warning that Milei's remedies risked devastating the country.
- Milei responded not with caution but with force: slashing subsidies, eliminating entire ministries, rewriting currency rules, and stripping organized labor of its traditional leverage over the economy.
- The shock drew capital rather than repelling it — $18.8 billion in foreign investment flowed in during Q4 2025 alone, and a $20 billion currency swap with the U.S. Treasury reinforced the signal that Argentina had changed course.
- Energy became an unexpected engine of momentum, with oil production surging 32% and natural gas output climbing 11%, adding structural weight to what might otherwise look like a fragile rebound.
- By April 2026, the numbers had outpaced the warnings: inflation at 34%, exports near $9 billion monthly, and GDP up 4.4% — a trajectory that has forced critics to reckon with results they did not anticipate.
Three years after Javier Milei assumed the Argentine presidency in December 2023, the economy he inherited — drowning in 211% annual inflation, contracting, and hemorrhaging public funds — has undergone a transformation that confounded many of his early critics. A coalition of 108 economists, including Thomas Piketty and Colombia's former finance minister José Antonio Ocampo, had warned that his remedies were "laden with risks" and potentially deeply damaging. By April 2026, inflation had collapsed to 34%, exports were approaching $9 billion per month, and GDP had grown 4.4% over the preceding twelve months.
The turnaround rested on a series of hard choices. Milei's government slashed subsidies, dismantled entire ministries, and restored a primary budget surplus. Currency rules were rewritten in a move amounting to informal dollarization, and international capital markets — long closed to Argentina — were reopened. These measures were not gentle: they eliminated organized labor's traditional leverage and exposed Argentine businesses to foreign competition. But they also sent a credible signal to the world that Argentina intended to change course.
Capital responded. A $20 billion currency swap with the U.S. Treasury bolstered investor confidence, and $18.8 billion in foreign capital flowed in during the final quarter of 2025 alone. The energy sector became a growth engine, with oil production jumping 32% to 882,200 barrels per day and natural gas output climbing 11% between 2023 and 2025.
Observers like Pete Earle of the American Institute for Economic Research credited the government with moves that could "serve as a manual for making the world richer," while journalist Javier Negre attributed part of Milei's political durability to his outsider persona — blunt, unpolished, and relentlessly driven. The vindication is not total; Argentina's economy remains fragile in ways three years of recovery cannot fully erase. But the trajectory is undeniable, and the questions that remain — whether gains can be sustained, broadly shared, and replicated elsewhere — are now the questions of success rather than survival.
Three years after Javier Milei took office in December 2023, Argentina's economy has undergone a transformation that confounded many of his early critics. When he inherited the presidency, the country was drowning in a 211% annual inflation rate, its economy was contracting, and the government was hemorrhaging money faster than it could collect it. A coalition of 108 economists from around the world—including the French economist Thomas Piketty and Colombia's former finance minister José Antonio Ocampo—had signed a letter warning that Milei's proposed remedies were "laden with risks that make them potentially deeply damaging to the Argentine economy and Argentine people." They worried that his seemingly straightforward solutions would cause short-term devastation while narrowing the government's policy options for years to come.
By April 2026, the picture had shifted dramatically. Inflation had collapsed to 34% annually. The country was exporting nearly $9 billion per month. The economy had grown 4.4% over the preceding twelve months. These numbers suggested that whatever damage critics had feared, it had not materialized—or at least, the recovery had outpaced it.
The turnaround rested on a series of hard choices. Milei's government slashed subsidies, dismantled entire ministries, and clamped down on public spending with enough force to push the country back into primary budget surplus. The administration also rewrote the currency rules, implementing what amounted to an informal dollarization of the economy, and pried open the doors to international capital markets that had been sealed shut. These moves were not gentle. They eliminated organized labor's traditional leverage. They exposed Argentine businesses to foreign competition. But they also signaled to the world that Argentina was serious about changing course.
Capital responded. A $20 billion currency swap agreement with the U.S. Treasury bolstered investor confidence at a critical moment. In the final quarter of 2025 alone, $18.8 billion in foreign capital flowed into the country. The energy sector, meanwhile, became a growth engine. Oil production jumped 32% from the start of Milei's term, reaching 882,200 barrels per day. Natural gas output climbed 11% between 2023 and 2025, hitting 48.748 billion cubic meters annually.
Evan Ellis, a professor at the U.S. Army War College's Institute for Strategic Studies, observed simply that "Milei really knows his stuff." Pete Earle, senior research director at the American Institute for Economic Research, was more expansive. He credited the government with redefining the exchange rate, breaking the grip of organized unions, and reopening capital markets—moves that would intensify competition and, in his view, benefit everyone. "The conclusion of Milei's economic policies," Earle said, "is that they work and could serve as a manual for making the world richer and better. Inflation has collapsed, and that single change has fed other positive things." He called it "one of the greatest gifts to the rest of the world."
Javier Negre, owner of the newspaper La Derecha Diario, attributed some of Milei's political durability to his persona. Unlike Ronald Reagan, who embodied the establishment, Milei was an outsider—blunt, unpolished, willing to say what he thought. He ran a lean operation and worked twenty-hour days, always on the phone, always pushing. That style, Negre suggested, had helped solidify Milei's political image even as his policies were being tested.
The vindication is not total. Argentina's economy remains fragile in ways that three years of recovery cannot fully erase. But the trajectory is undeniable. The economists who warned of devastation have been forced to reckon with results that contradict their predictions. Whether the recovery can be sustained, whether the gains can be distributed broadly enough to hold together the coalition that elected Milei, and whether other countries might attempt similar experiments—these remain open questions. For now, though, Argentina's numbers tell a story of a gamble that, against the odds, appears to be paying off.
Citações Notáveis
Milei really knows his stuff.— Evan Ellis, U.S. Army War College Institute for Strategic Studies
The conclusion of Milei's economic policies is that they work and could serve as a manual for making the world richer and better.— Pete Earle, American Institute for Economic Research
A Conversa do Hearth Outra perspectiva sobre a história
When Milei took over, the economy was in free fall. What made him think austerity would work when so many economists said it would backfire?
He was operating from a diagnosis that the previous government had spent money it didn't have for so long that the currency itself had become worthless. You can't print your way out of that. You have to stop the bleeding first.
But stopping the bleeding means people lose their jobs, their subsidies disappear, their purchasing power evaporates. How did Argentina absorb that shock?
It did absorb it, though not painlessly. The key was that once inflation stopped accelerating, people could actually plan again. A peso meant something. Businesses could make contracts without them becoming worthless in weeks. That stability attracted foreign money.
The capital inflows—the $18.8 billion in one quarter—that's remarkable. What changed investors' minds about Argentina?
The currency swap with the U.S. Treasury was crucial. It was a signal that America believed in what Milei was doing. But more than that, investors saw the government actually following through. No backsliding, no political pressure to reverse course.
What about the people who lost their jobs when ministries were cut and subsidies ended? Are they part of this recovery story?
That's the part the numbers don't fully capture. The recovery is real, but it's built on a foundation of real hardship for some. The question now is whether growth broad enough to bring those people back into the economy, or whether the gains stay concentrated.
Do you think other countries will try this playbook?
Some will try. But Argentina's situation was extreme—211% inflation, complete loss of currency credibility. Most countries don't need to go that far. And Milei had something else: he was willing to be unpopular. Not every leader can sustain that.