Mileis reforms: Argentina on the verge between growth and crisis!

Mileis reforms: Argentina on the verge between growth and crisis!

With his new reforms in Argentina, Javier Milei is taking an exciting but also risky course. The president, who took office at the end of 2023 with a radical austerity program, wanted to make the crisis-ridden country's economy flourish again. And although the first successes are visible – so reported ZDF today that economic growth exceeded the 4% mark for the first time in 15 years - Milei has simultaneously hit the market with a roller coaster of emotions.

An example of the impact of the reforms is Guilhermo Betancourt, a 57-year-old steelworker who lost his job due to the new regulations. Together with other workers, he has protested against the continued decline in wages and rising unemployment. With the opening of markets and the stabilization of the peso, many companies are better positioned, but industrial production is plummeting, leading to further job losses.

Milei has made considerable progress in a short period of time. This meant that the inflation rate could be reduced from almost 300% in April 2024 to around 34% in the summer of 2025, which also eased the burden on people's purchasing power - at least in theory. Still, an inflationary storm is raging, forcing citizens to invest in dollars to protect themselves. Critical voices, such as that of economic sociologist Daniel Schteingart, warn of the long-term consequences of the policy. He raises the possibility that a devaluation of the peso may be inevitable.

Political and economic challenges

Milei's popularity seems to be waning. After allegations of corruption, particularly involving his sister, and a heavy electoral defeat in the province of Buenos Aires, his support in parliament fell to below 40%. In addition, the midterm elections on October 26, 2025 are just around the corner, and Milei must face the challenge of securing a stable majority for his reforms. This uncertainty could have a negative impact on the already vulnerable currency.

According to the Telepolis There is discussion in the United States about providing aid to Argentina, with some experts warning that such bailouts without political consensus could potentially burden the American people. Meanwhile, the need for a change of course in the foreign exchange market is considered critical.

The future of the Argentine economy

Despite all these challenges, there are also positive outlooks. A forecast of the Germany Trade and Invest forecasts economic growth of 5.7% for 2025 and even 4.8% for 2026. Key sectors such as agriculture are boasting record earnings, and grain export earnings are estimated at $31.6 billion.

Milei has promised to introduce further reforms, such as lifting capital controls and measures to recover undeclared savings. It remains to be seen whether these announcements and the already visible successes will be enough to convince the population and regain the trust of investors. One thing is certain: Argentina is at a crucial turning point, and the next political stage will be crucial for the country's economic stability.