Argentina under Milei, without picking a side: what has really improved and what has got worse

Where it started from (the context that gets forgotten)

Milei did not inherit a calm country. He took over runaway inflation — 211.4% over the twelve months of 2023, according to INDEC, Argentina’s national statistics office — gross central bank reserves of $21,209 million, 41.7% of the population in poverty in the second half of 2023, and a state spending far more than it took in, plugging the hole by printing money, which is the fuel inflation runs on. That is the starting point: a country that had spent decades living with rising prices as a chronic illness.

The big win: inflation and a balanced budget

Start with what almost nobody disputes. Annual inflation has fallen from 211.4% to around 33%, passing through 118% at the end of 2024. Behind that sits something more technical and just as decisive: Argentina closed 2024 with a budget surplus for the first time in some fourteen years. The state stopped spending more than it earned, cutting spending by around 27% in real terms. This is the famous chainsaw: fewer energy and transport subsidies, less public works, smaller transfers to the provinces, and a deep cut to pensions. With no deficit there is no need to print money, and without printing, inflation eases. That, in one sentence, is the engine of the whole plan.

The cost: bills, and poverty that spiked before it fell

But that win has been paid for, and there is no point dressing it up. Public services, heavily subsidised before, have risen far more than everything else: the utility basket for the Buenos Aires metropolitan area, known there as the AMBA, rose 944% between December 2023 and August 2026, against 249% for prices in general, according to the IIEP, an economics institute at the University of Buenos Aires. The flip side of removing subsidies is that households get the bill. And poverty went the whole way round: from 41.7% of people in the second half of 2023 it shot up to 52.9% in the first half of 2024 — with extreme poverty at 18.1% — and from there fell to 28.2% at the close of 2025, some 8.5 million people, which is INDEC’s latest half-yearly reading. Gap declared. This used to say that poverty “climbed back to around 30% in the first quarter of 2026, with extreme poverty at 6.5%”, and the source note credited both to INDEC. INDEC does not publish quarterly poverty: its series is half-yearly. Setting its 28.2% for the second half of 2025 against a quarterly figure from a different body manufactures a rise that appears in no official series. Both figures are withdrawn. What that report does support, and what returns to the text: the 28.2% poverty rate at the close of 2025 and the 41.3% of under-14s in poor households, which is the hardest of the three. Its extreme-poverty rate is 6.3% of people, not the 6.5% this piece used to give. There is also a detail that cuts both ways. Wages have begun to recover, and INDEC’s general index was up 35.7% year on year in June 2026, above inflation over the same period — three months in a row without losing to prices. But the gains are spread very unevenly: registered private-sector pay is up 29.6% and public-sector pay 30.1%, while what pulls the average up is informal work, up 59.5% from a much lower base. In short: the adjustment worked in the state’s accounts, but citizens paid for it, and those at the bottom felt it first and hardest.

The recovery starting to show

The picture is not only austerity. After the initial recession — unavoidable when you turn off the tap all at once — activity is growing again: GDP rose 4.4% in 2025 according to INDEC and forecasts put it near 3% in 2026 and 2027, driven by investment and exports, with energy and mining as the engine. Above all Vaca Muerta, the huge shale oil and gas field in Patagonia that has become the country’s main export bet. Reserves have been rebuilt: on 25 August 2026 gross reserves closed at $50,913 million, a high for the Milei era and the highest level since September 2019, although much of the recent rise comes from gold rising in value rather than from purchases. The debate now is when the “cepo”, the controls that limit how many dollars Argentines can buy, will be lifted for good, something the market treats as likely. That is the government’s underlying argument: the worst is over and the good part is starting to arrive.

The real question: was it avoidable?

This is the core of it, and it deserves a serious answer rather than a slogan. Milei argues there was no alternative: that gradual adjustments “always end in crisis” and that, with no funding to stretch the process out, only shock was left. His case, in short: a country cannot sustain three-digit inflation indefinitely, and part of the problem was precisely subsidies and spending that could not be paid for; so some things getting dearer is the unavoidable toll for not ending up in hyperinflation and collapse.

On the other side, the criticism does not deny an adjustment was needed, but questions how it was shared out: the weight fell disproportionately on pensioners and vulnerable households, and those at the bottom could have been protected more while more was cut at the top. It is the old dilemma between “shock” and “gradualism”, and it has no clean technical answer: it depends on how much real fiscal room there was (little, almost everyone agrees) and how much social pain is acceptable in exchange for stability. Telling it honestly means accepting that both things can be true at once: that the adjustment was largely unavoidable and that how it was shared out is open to argument.

What was not in the government’s hands (and a warning)

Some of the good and some of the bad comes from outside: the inheritance already described, the drought that hit farming, international prices. And a warning about method: INDEC’s own poverty measurement is politically disputed, so the official figure is used here and the controversy is stated, without buying either the “15 million rescued” story or the catastrophist one.

What comes next

There are elections in 2027, and the whole plan is on the line there. The question is not ideological but practical: if inflation stays low and activity grows, but poverty does not fall enough, will society hold out long enough for the good part to reach everyone’s table? Because GDP pays nobody’s bills: what counts is your wage, and what your bills cost.

Argentina is not an experiment that confirms an ideology: it is a real country where one thing improves while another gets worse at the same time, and where the interesting question is not “Milei, good or bad?” but “was there another way out of here, and who has to pay for it?”. The data itself points to a partial answer: real fiscal room was minimal (almost every analyst agrees on that), so a slower adjustment would have stretched inflation — and its own social cost — out over time, with no guarantee of a better result. Argentina already tried gradualism under Mauricio Macri between 2015 and 2019, and still ended in a currency crisis and an IMF bailout. Where there does seem to have been more room is in the sharing out: protecting pensioners and vulnerable households a little more while cutting deeper elsewhere. Neither route avoids the pain entirely; it only changes who pays it and when.