Javier Milei Gets to Work on the Economy

What’s happening: Newly-elected President Javier Milei is making waves with his policies to bring Argentina’s economy out of its recent decline.

Why it matters: Milei’s steady success — and approval amid sustained economic issues — could make him the first openly libertarian president in recent history to effectively scale back government and inspire like-minded movements in the region and beyond.

What he’s done: Immediately upon taking office, Milei first devalued his country’s currency, the peso, something he argued was necessary to fight inflation.

Slashing government: The president announced he would refuse to extend the contracts of 70,000 government workers — on top of the 50,000 he cut in the past few months. Further, he slashed nine government agencies and took his revolution to Davos, where he lambasted the World Economic Forum’s globalism and Marxist policies.

Economic success: While the country’s annual inflation rate is still sky-high, Argentina’s monthly inflation rate for February decreased by 13 percent. The positive movement has encouraged investors and brought Argentina’s risk index to a two-year low.

• More: Milei has agreed to compromise on his initial fiscal package, which was rejected by parliament. However, he threatened to use presidential powers to put some of his changes into effect, like cutting perks for elected officials.

A rough road ahead: Milei has commented that the economy will get worse during his shock therapy before it gets better. He expects a V-shaped economic recovery with a sharp improvement after April when government controls loosen up.

• Maintaining support: Argentinians are still cautiously trusting of Milei. Even with persistent economic issues, his approval has hovered in the upper 40s.