Praised by Trump and Musk, is Argentina’s Milei an economic miracle maker?

Argentine President Javier Milei’s radical economic policies led to an economic miracle despite predictions of doom by economists, academics and political opponents. Milei was the first foreign leader to meet with President-elect Trump since the November election, and was cheered on by Elon Musk on X and in person at Musk’s headquarters in Texas.

Miley’s star continues to rise.

“What President Milei has done in Argentina economically is nothing short of a miracle,” Joseph Humire, executive director of the Center for a Secure Free Society, told FOX Business.

“In less than a year, he was able to first stop the country’s spiral into hyperinflation because when he took office last December 2023, the country was days or weeks before it went into hyperinflation. So he took some actions immediately. Then, he focused to reduce consumption, and then in the middle of 2024, he significantly rounded off inflation to stabilize the Argentine economy.”

ARGENTINE MILEI ELIMINATES DEFICIT, PRAISED AS A MODEL FOR MUSCO’S ‘DOGE’

The Milei administration implemented severe austerity measures, including significant cuts in public spending and subsidies. These actions led to a significant reduction in monthly inflation, which fell from 25.5% in December 2023 to 2.7% in October 2024. The Argentine peso strengthened against the dollar on the black market, indicating increased confidence in the national currency. This appreciation reflects the positive reception of Milei’s economic policy in the financial markets.

Martín Menem, president of Argentina’s House of Representatives and vice president of Milei’s political party, La Libertad Avanza, told FOX Business: “Today we have a fiscal surplus. We’ve lowered inflation. The economy is expanding. Credit is coming back. Poverty is Real wages are recovering month by month month, are getting lower for domestic and foreign investors. In addition to all that, expectations are getting higher, and every day we are getting closer to our goal, which is the restoration of the nation and prosperity. Argentinian.

“To have these results that we have never had, we are doing what has never been done before. The results show that President Milei’s path is working. We have come to end the decline that the fiscal deficit creates and we will work every day to deregulate the economy to get it back on track of growth.”

Despite these successes, challenges remain. Austerity measures have led to an increase in unemployment and poverty, with more than half of the population affected. Additionally, economy it was projected to decline by 3% in 2024, indicating that while stabilization efforts have yielded positive results, structural problems remain. These are some of the reasons why experts and economists still question Miley’s achievements, comparing them to narratives and policies that they find contradictory.

FOX Business contacted two sources who signed a letter signed by 108 economists criticizing Miley’s economic platform released ahead of the country’s election. Economist Pablo Bortz told FOX Business, “After re-reading the letter we signed, I stand by my position on the letter, noting that the government has given up on the idea of ​​dollarization.”

Another signatory, economist Matías Vernengo, said: “I maintain my position in the letter I signed because I believe it is essentially correct. Inflation accelerated after the Mileus devaluation. The sustainability of the relative stability of the nominal exchange rate remains to be seen.”

Roberto Cachanosky, an economist who was not part of the letter, told FOX Business: “The most contradictory thing about Miley’s speech and his politics is that in his speech he always claimed that the state was his enemy. That it should not intervene in the economy. That prices be free and that the state steals with taxes.

“Furthermore, as an MP, he said that taxes were an obstacle to slavery. The reality is that his pro-market speech ended with the BCRA (Argentine Central Bank) not only intervening in the interest rate and abandoning foreign exchange controls, but also keeping the foreign exchange controls during this year, which is a real confiscation of exporters.”

ARGENTINA’S JAVIER MILEI TURNS INFLATION ON ITS HEAD EVEN AS POVERTY GROWS

Milei’s government announced the Argentine the first budget surplus in 14 years on Friday, handing the self-proclaimed libertarian another major victory. However, criticism of some of his policies remains.

Political analyst Antonella Marty told FOX Business: “Despite promises of reform, the much-vaunted adjustment aimed at the so-called ‘political caste’ under President Javier Milei has not materialized. Instead, his administration is filled with unqualified officials, family members and social media operatives tasked with promoting a moral and ideological agenda, often framed in a deeply religious and messianic tone, focuses on a personalist model where dissent is not tolerates.

“The brunt of the government’s adjustments has fallen disproportionately on the private sector, which is facing higher taxes and lower real wages. Since Milei took office, the private sector has lost 166,000 jobs, while the public sector has seen 64,000 layoffs. This has created a bleak scenario for consumption and poverty across the country, for example, consumption of meat — a cultural staple — has fallen by 11%, and 71% of families can no longer afford afford traditional asados. Rising utility costs, including electricity, water and gas, have only added to the pressure.”

Economist Diego Giacomini recently told FOX Business: “Milei says he will eventually restore competitiveness to the private sector by opening CEPO (allowing the free movement of capital) on a day when the exchange rate gap and inflation are zero. Today the exchange rate gap is at 3 percent, and according to the latest data, we are already there, and he hasn’t opened CEPO yet.”

“At the end of the day, economics will not be something characteristic of Javier Milei. As someone who uses and exploits the word freedom, absolutely everything he does in an ethical, philosophical, philosophical-political sense is at the antithesis of classical liberalism. So when things go badly economically and socially, classical liberalism and freedom will be to blame. This is very serious.”

While some experts suggest that President Milei’s policies have defied some initial economic criticism by achieving significant fiscal and monetary improvements, the social costs and ongoing economic challenges suggest a complex and nuanced outcome.

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Milei, who arrived in Washington this weekend for Trump’s inauguration, met with elected president in November at the America First Policy Institute gala, where Trump congratulated the Argentine “for the work you’ve done for Argentina. … Make Argentina great again.”

“I think President Milei pulled off what many thought was impossible. He managed to turn the economy at least in a positive direction,” Humire said. “A lot has to be done. It has to get rid of currency controls, attract more investment and increase the purchasing power of the Argentine peso. It is very difficult to come into office with a high approval rating and then maintain a high approval rating throughout the first year. Most presidents in the world sink a little to the end of the first year.”

Reuters contributed to this report.