Milei’s Plan for Argentina Economic Overhaul Faces 4 Big Hurdles

Argentina’s new president, Javier Milei, warned voters on the campaign trail that the “shock therapy” he would use to stabilize the country’s serially ailing economy would be painful, and his prediction has come true. Consumer price inflation has accelerated since Milei took office on Dec. 10: Prices rose 71% through February — and 276% from a year earlier — after he scrapped price controls, devalued the currency and started to cut subsidies that held down prices for transportation and utility bills.

Wall Street investors have cheered on Milei and pulled Argentina bond prices out of the gutter. But consumer spending has tanked as high inflation devours wages and pension payments, with the country falling into its sixth recession in 10 years. Milei says his kitchen-sink approach to fixing the economy is necessary to correct the destructive policies of his predecessors, whom he faults for a poverty rate that’s approaching 42%, just below the peak reached during the Covid-19 pandemic and up from 26% in 2017.

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