Russia and China hold joint military drills on the Sea of Okhotsk
Associated PressOCT 2024
Argentina's Monthly Inflation Drops to 2.7%
Above: Javier Milei, Argentina's president, delivers the 2025 budget at the National Congress in Buenos Aires, Argentina, on Sept. 15, 2024. Image copyright: Tomas F. Cuesta/Contributor/Bloomberg via Getty Images
The Spin
Establishment-critical narrative
Despite inheriting an economy ravaged by 211% inflation, Pres. Milei's bold "shock therapy" is bearing fruit in Argentina. His uncompromising focus on balancing budgets and ending money printing has driven inflation down dramatically. While the path has been painful, with necessary recession and spending cuts, the strategy's success is evident in renewed mortgage lending and surprising economic growth.
Pro-establishment narrative
Argentina's economic challenges lie beyond just inflation. These include deep-seated fiscal deficits, repeated debt defaults, and a reliance on currency controls that distort trade and investment, and increase poverty. Milei is addressing these issues by cutting subsidies and public spending, yet these austerity measures risk public backlash and economic contraction. Structural reforms and eventual dollarization are Milei's goals, but they require cautious navigation.