Abstract Book of the 6th World Conference on Management and Economics
Year: 2025
[PDF]
The Economic Development in Argentina under Javier Milei – 18 Months into a Libertarian Experiment
Martin Schmidt-Schweflinghaus
ABSTRACT:
When President Javier Milei resumed office on 10/12/2023, he was confronted with the economic malaise of a country that had suffered from decades of statist interventionism, interrupted by periods of neoliberal policy approaches that were never able to get the country back on track.
In the second half of the year 2023, about 41,7% of Argentines were living in poverty, with soaring inflation past 276% pummelling household spending power.
As he had outlined on the campaign trail, Javier Milei took on this situation with the recipe book of the Austrian School of Economics, which basically puts emphasis on human behaviour and the effects of state interventions into the market place.
Backed by his party coalition “La Libertad Avanza”, he implemented a decree for total deregulation, which manifested in the abolition of rent controls and setting free the market forces in domestic aviation (“open-sky policies”), which revived both the housing market and domestic aviation market.
Additionally, every public investment was withdrawn.
He also limited the ability of the central bank to create money, starting in April of 2024 and had eight federal agencies abolished, setting more than 30.000 public servants free.
After the implementation of this policy package, Argentina has reached a budget surplus since January of 2024, the inflation rate has been going down since April of 2024, and the GDP growth amounted to 8% from April of 2024 to April of 2025.
On the downside, there is a rising external debt and insufficient foreign exchange reserves.
It remains to be seen whether Milei will be able to get Argentina on a stable path of sustainable prosperity, finding a way out of stagflation (economic recession + inflation).
Keywords: Libertarian therapy, economic recovery, total deregulation, state interventions, stagflation