Milei conquers Buenos Aires: Radical reforms with tailwind!

Milei conquers Buenos Aires: Radical reforms with tailwind!

In Argentina, President Javier Milei's victory in the midterm elections is causing a stir, and not without reason. His La Libertad Avanza party won 41.5% of the vote in the key province of Buenos Aires, while the governing coalition was close behind with 40.8%. This represents a clear trend, as Buenos Aires has long been a Peronist stronghold. The win of 64 seats in parliament for Milei's party not only strengthens his reform plans, but also hopes for an end to the opposition, which often blocks his plans. [Image] reports that Milei appeared in the election campaign with a chainsaw as a symbol of his radical austerity measures, which are already showing some results in the first year of his presidency - such as falling inflation.

But despite this progress, Argentina is not without its challenges. Many citizens continue to struggle with declining purchasing power and poverty, while Milei, in his cabinet reshuffle announced after the election, not only wants to increase the speed of reforms, but also plans to increase social spending on pensions, health and education. [Tagesspiegel] emphasizes that Milei has given in after a previous electoral defeat in order to get closer to the needs of his voters.

Economic situation and reforms

Javier Milei has been in office since December 2023 and has embarked on a radical austerity course to combat hyperinflation. Although this fell from an alarming 211.4% in the first year of his presidency to 117.8% in 2024, the situation remains precarious for many Argentines. The poverty rate is still over 50%, the highest level in 20 years. Despite a reduction in the monthly inflation rate, the negative side effects are noticeable: job losses and the removal of subsidies for electricity, gas and local public transport. [Tagesschau] mentions that many citizens find it difficult to perceive the economic improvements.

The political situation remains tense, as Milei is dependent on a majority in Congress to push through his reformative agenda, which he currently lacks. Many of the measures introduced, such as the drastic cuts in spending and government projects, have led to protests, particularly from pensioners affected by the radical measures. Despite the challenge, the government has achieved a budget surplus for the first time in years. However, these successes come at a significant social price.

The coming months will be crucial for Milei's reform policies and how his government responds to the challenges. With the support of international investors and positive feedback from the US government, the financial markets are excited about further developments in Argentina. The road is rocky, but many Argentines hope for a positive turnaround in their economic situation.