BUENOS AIRES — Argentine President Javier Milei's administration confronts a difficult choice between revitalizing the economy and controlling inflation, as public sentiment declines across the nation. Many Argentines report their daily lives worsening, prompting the president to acknowledge that "not everyone is better off" under his policies.
Milei, known during his campaign as "El Loco," positioned himself as an outsider promising significant economic and political change. He campaigned against large government, slashing the number of ministries by almost half and limiting the central bank's functions, including stopping the printing of money to fund government deficits.
His economic plan centered on macroeconomic order, aiming for fiscal adjustment through spending cuts and avoiding a deficit. The plan also sought to liberalize the exchange rate and eliminate currency and capital controls.
The country's economic indicators show a challenging environment, with interest rates soaring and national reserves low — conditions that make it difficult for Milei to sustain his fiscal adjustment measures.
Milei's approval ratings have dropped and disputes within the government have grown increasingly public, raising questions about his ability to manage his political coalition.
His administration came under scrutiny in August 2025 following a corruption scandal that implicated his sister and other close associates. That preceded an unexpected defeat in legislative elections in Buenos Aires, Argentina's largest province.
In an effort to build political support, Milei called a meeting with 20 of Argentina's 24 governors. The discussions focused on potential labor and tax reforms but face a significant hurdle: the governors are demanding increased fiscal resources, a demand that directly conflicts with his commitment to cut spending and maintain a fiscal surplus.
Milei also requires the support of Argentina's banks to access private credit. Banks have said their support is contingent on the government maintaining fiscal discipline, liberalizing the exchange rate and removing all currency and capital controls.
The White House has made a recent pledge that Milei hopes will provide crucial support for his administration, though specific details have not been publicly disclosed.
Speculation about alternative candidates on the right has grown as Milei's political difficulties mount. The Peronist movement also shows signs of resurgence, with former President Cristina Fernández de Kirchner polling competitively despite a corruption conviction and house arrest that bar her from running for office.
