Since the beginning of the mandate of Javier Milei, the new Argentine macroeconomic regime was articulated on three essential anchors: the prosecutor, the monetary and the exchange. Less than a month after assuming, the Government eliminated the primary fiscal deficit through a drastic adjustment of public spending, a measure that seemed political and socially unfeasible in a country accustomed to blocking in the streets any attempt to modify acquired privileges.
The process, however, maintained the uniqueness of not breaking contracts or affecting private property. The recent Argentine history offered a history of stabilizations achieved with very high systemic costs: the Bonex Plan and asymmetric pesification left confidence scars that still limit potential growth and credit availability. In contrast, the current scheme closed the deficit without resorting to those emergency shortcuts.
In the monetary, the turn was equally blunt. Since December 2023, the issuance of money was completely canceled to finance the treasure, achieving a sustained financial surplus. By mid -2024, the second monetary tap was also closed, associated with the purchase of reservations, and after the departure of the CEPO in April 2025, the strategy with real interest rates was completed, which stimulated savings and moderated the demand for foreign exchange.
These measures, of difficult technical instrumentation and high political risk, eliminated the primary and quasi fiscal deficit, draining several monetary base points that were destined to pay interest in the past debt. However, in a bimonary country as Argentina, stabilization requires controlling both the peso and the dollar. Therefore, an extraordinary devaluation was executed, an exchange overshooting designed to resist until the headache, complemented with a monthly crawling of 2% monthly to avoid a real premature appreciation.
The third anchor, the exchange rate, was the most discussed. In the months prior to the release of the exchange rate, tensions were already evidenced in the Blend scheme for exporters, which implied an annual drainage of almost 15,000 million dollars to the reserves of the Central Bank. The departure of the CEPO was timely, executed during the second quarter, when the strong liquidation of the agriculture contributed the necessary liquidity to sustain the flotation between wide bands, a regime to which the local economy was not used.
In parallel, the deregulation policy promoted measures aimed at simplifying, overburging and opening the economy to the world. After decades of survival in a structurally high risk context, with margins designed to protect themselves more than to compete, this new framework requires efficiency: companies that wait for subsidies or devaluations as a salvation table will find a regime that does not forgive inertia.
The first results of the economic program exceeded expectations: inflation fell from 220% per year to less than 30%, poverty decreased from 43% in December 2023 to 31% in March 2025 and GDP grows at 6% annualized. However, this recovery is heterogeneous: the export sectors lead and grow the purchase of durable goods, while those linked to mass consumption still show a certain recession.
Looking ahead, the challenges are multiple. On the fiscal level, lowering taxes becomes urgent to return competitiveness, but timing will be critical so as not to risk primary balance. The expected tax reform, whose project would be presented after the October elections, will seek to simplify the scheme, increase collecting efficiency, reduce informality and lower fiscal pressure without neglecting the State’s solvency.
Monetary policy, meanwhile, must ensure that the circulating does not exceed the real demand for money. An excess of liquidity would put the exchange stability in check; Excessive restriction, on the other hand, would limit productive expansion. Given this dilemma, the government bets on endogenous dollarization, promoting the use of non -banking dollars in the purchase of durable and real estate, as a non -inflationary monetization route.
The external front is presented as a yellow traffic light. The current account deficit climbed 5000 million dollars in the first quarter. This partial red is explained by the combination of imports of capital goods – years of decapitalization – and the precautionary purchase of foreign exchange, in a country with history of traumatic devaluations. To this is added the exit by tourism, encouraged by a more competitive real exchange rate to travel.
Although the second trimester data were not yet published, similar behavior is presumed. In the third quarter, with electoral uncertainty, the dollarization of portfolios could be intensified and export settlement for seasonal reasons. If the income of the capital account was insufficient, the band scheme allows movements up to 1400 pesos per dollar without systemic risk. A slide towards that level would not imply an inflationary spiral, given the current salary stagnation and moderate aggregate demand.
The key question is whether the exchange rate in the medium term will reflect a 2030 Argentina with a lifting cow and mining as new “agros” currency multipliers or if immediate challenges will impose a previous rearrangement. The country also requires progress in structural reforms-labor, pension, tax-and refinance its external debt, for which it needs to lower its country risk to levels of 400-500 basic points, a condition for accessing voluntary credit to sustainable rates.
The market, as always, anticipates. It does not always be right, but reacts before academic diagnoses. For now, fiscal and monetary anchors support stability. The dollar remains controlled and inflation continues its descending path. However, the sustainability of this scheme will depend on a less technical and more political factor: the ability of the government to build consensus and viable background reforms, in an increasingly restrictive and competitive global scenario.
Argentina is facing a historical opportunity to reconfigure its productive model and its international insertion. Fiscal discipline, monetary independence and commercial opening are necessary conditions. But not enough. The key will be in translating macroeconomic stability into an inclusive growth, capable of reverse decades of structural poverty and talent escape, to finally build a country that not only stabilizes its accounts, but also its destination.
By Antonio Aracre
