📊 Inflation in Argentina

Argentina has a pretty infamous inflation problem. How successful has Javier Milei's economic shock therapy been in fighting this problem?

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Argentinian Inflation 🏦

When Javier Milei assumed the Argentinean presidency in December, he was without a doubt the most polarizing figure in the country’s recent history not named Kirchner.

The libertarian economist won last year’s presidential election on promises to take a chainsaw to the state and restore some semblance of economic normalcy to his country, which has long been plagued by boom-and-bust cycles and hyperinflation.

In particular, fighting inflation and stabilizing the country’s macroeconomic fundamentals was the top priority for Milei and the roughly 14.5M Argentines who put him in office, so let’s check in on where Latin America’s third-largest economy sits today.

Inflation in 2024 has been almost double last year’s

Cumulative inflation is still on the rise, sitting at roughly 80% at the end of June. This figure, well higher than where this time last year, means that investors will keep their money in other, more stable currencies, while Argentines’ purchasing power is greatly diminished. Despite – and in part owing to – Milei’s “shock therapy” liberalization policies of austerity, subsidy cuts, and state firm privatizations, the country’s citizens are in dire economic straits, with over half of them living in poverty.

Which isn’t to say there’s been no progress in the fight against inflation. Month-over-month inflation, for example, soared in December as Milei took office and some early policies – such as devaluing the peso – kicked in. Since then, however, it’s largely been on the decline, reaching roughly 4% in May for the first time since early 2022. Last month saw a small uptick, as you’ll see below.