Argentina’s monthly inflation rate in April fell sharply to a single-digit rate for the first time in six months, signaling progress in President Javier Milei’s efforts to curb the country’s rampant inflation. Despite the positive trend, the economic policies implemented by Milei have led to hardships for many families, as the value of the peso has plummeted while the cost of living has soared. Milei’s austerity measures have attracted praise from the International Monetary Fund and market watchers, but the reality on the ground paints a different picture, with an annual inflation rate of nearly 290%.
While Milei touts good economic news on his social media feed, including rising bond prices and a surplus in the country’s finances, experts caution that falling inflation may not necessarily be a sign of economic success, but rather a symptom of a painful recession. Argentina’s GDP is expected to shrink this year, and the collapse in private spending resulting from the economic measures has left people worse off than before, leading to decreased consumption and subsequent impacts on the economy.
The economic slowdown is visible in daily life in Buenos Aires, with long lines outside discounted groceries, empty seats in restaurants, and growing strikes and protests. Many families are feeling the pinch of high prices, with some resorting to rummaging through garbage dumps for food. Retail sales have plummeted, and the consumption of beef, a national staple, has hit a three-decade low. Milei’s policies, aimed at cutting government spending and deregulating the economy, have brought about significant changes in the country’s economic landscape.
Milei campaigned on promises of drastic reforms to address Argentina’s economic challenges, symbolizing his approach with a chainsaw to illustrate his intent to trim the bloated state. By slashing spending on various sectors and devaluing the peso, Milei sought to align the exchange rates and reduce inflation. However, these measures have also led to significant price increases, while wages have remained stagnant or declined. The minimum wage is only around $264, making it difficult for many to afford even basic necessities.
Despite the hardships faced by many due to Milei’s policies, the president has managed to maintain relatively high approval ratings, around 50%. This support may stem from Milei’s ability to shift blame onto his predecessors and frame himself as working towards the country’s betterment. While trade unions and leftist parties have pushed back against the austerity measures, public discontent is rising, as seen in recent protests against budget cuts to public universities. The future of Argentina’s economy remains uncertain as the country grapples with the impacts of the austerity program.
