BUENOS AIRES—Argentina's annual inflation rate fell to 31.8 percent in November 2025, its lowest in more than seven years, down from 211 percent when Javier Milei took office in December 2023. The drop is the clearest evidence yet that his austerity program has worked at its core task. The harder question is whether the gains hold.
The path down was steep. Monthly inflation stood at 12.8 percent in November 2023, the last full month of his predecessor Alberto Fernández's administration. Milei's government pulled that figure down to 1.5 percent by May 2025—a result his economic team treated as validation of the no-money-printing pledge at the center of his platform. Then it reversed. Monthly inflation had climbed back to 3.4 percent by the end of March, after 10 consecutive months of increases, according to a Banco Provincia report.
The mechanism behind the initial success was blunt. Milei slashed subsidies, cut government employment and eliminated budget deficits that previous administrations had covered by expanding the monetary base. The policy rested on a single premise: that Argentina's chronic inflation was a fiscal disease, not a monetary one, and that removing the deficit removed the cause. For roughly 18 months, the data supported the argument.
Now Milei is attempting something more durable. His strategy is to bind not just his own government but all future Argentine governments to the same discipline—creating structural constraints that make money-printing politically and legally difficult regardless of who holds office. The analogy is deliberate: like Odysseus lashed to the mast to resist the Sirens, the goal is to make backsliding on fiscal rules impossible, not just unpopular.
The practical instruments of that effort include Argentina's arrangement with the International Monetary Fund and the internal spending rules the administration has applied since taking office. Milei's team has framed the IMF relationship not merely as a financing mechanism but as an external anchor—a set of conditions that ties any future government's hands on deficit spending. Argentina has a long history of IMF programs abandoned under political pressure, which is part of why the administration has leaned into the external constraint rather than treating it as a burden.
The wrinkles in the plan are visible in the wage data. Real wages fell 6 percent between November 2023 and March, according to the Banco Provincia report. That figure represents the distributional cost of disinflation: the same price stability Milei's government claims as a success has compressed household purchasing power for much of the country. For an administration seeking re-election credibility, and for the durability of the reform program itself, that gap between macroeconomic stabilization and household experience is the central political problem.
The government's own forecasts have already shifted. Early promises that monthly inflation would tend toward zero by August 2025, and that the year would close around 10 percent annual inflation, are no longer operative. The acceleration from 1.5 percent per month to 3.4 percent per month over a 10-month period signals that the disinflation was not yet self-sustaining. The government has indicated it wants to avoid any adjustment that could trigger a fresh price spike, leaving it in a holding position rather than a forward one.
Milei's broader reform program has extended well beyond price stabilization. His administration has carried out what analysts describe as the most extensive liberalizing overhaul in Argentina since the 1990s, cutting economic regulations, reducing state employment and privatizing state functions across multiple sectors. Those structural changes are the second pillar of his argument that this time is different from prior Argentine stabilization attempts—that the fiscal consolidation has a supply-side complement that prior programs lacked.
The durability test comes from Argentina's own history. The country went through a convertibility regime in the 1990s that also attempted to tie governments to a hard constraint—in that case, a fixed exchange rate backed by a currency board. That system held for a decade before collapsing in the 2001-2002 crisis. Milei's team is aware of the comparison and argues that the current program avoids the exchange rate rigidity that made convertibility brittle. The peso's managed crawl, rather than a hard peg, is designed to preserve competitiveness while anchoring expectations.
The political clock adds pressure to the economics. Milei faces a congressional landscape that limits his ability to legislate the structural reforms into permanent law. His La Libertad Avanza party holds a minority in both chambers, which means the constitutional entrenchment of his fiscal rules depends partly on building coalitions that have been difficult to sustain. Reform that lives in executive decrees rather than legislation is reform that a future president can reverse by decree.
What Milei has accomplished is real. Bringing annual inflation from 211 percent to 31.8 percent in under two years, without a currency collapse or a banking crisis, is a result that eluded every Argentine government for the past three decades. What he has not yet accomplished is proving that the mechanism is irreversible. The gap between those two things is where Argentina's economic story is currently located.
