When they asked me to analyze the first year of managing Javier MileiI thought it would be simple to list a series of achievements, especially in the economic sphere, and prioritize them according to their impact. Although I was not wrong in this initial analysis, I soon realized that The list of challenges, threats and opportunities facing the government is no less.
Notable achievements
- Approval of the Base Law: Despite having a parliamentary minority, Milei managed to sanction this key regulation, which includes significant advances in labor, tax and pension reforms.
- Liberalization of prices and rates: This movement promoted a violent adjustment of relative prices, aligned with the economic stabilization process.
- Relaxation of the exchange rate: The elimination of SIRAS, an opaque system to regulate imports, stands out as one of the most important advances.
- Reduction of the exchange gap: This removed one of the biggest obstacles to the economy in the last two decades.
- Historical tax adjustment: The government reduced public spending by 30% in real terms, establishing a primary and financial surplus that reinforces economic autonomy.
- Retirement recovery: Pensions, which had lost 30 points of purchasing power, began a recovery process based on monthly adjustments according to the CPI.
- Incipient economic recovery: After a severe adjustment, GDP stopped falling in mid-2024, with growth prospects for the third quarter.
- Improved purchasing power: Private salaries, both registered and informal, reached the November 2023 level again.
- Country risk reduction: This indicator fell from 2,800 to 750 basis points, opening the possibility of returning to international markets.
- Progressive deregulation: The government is moving towards regulatory simplification that favors a pro-market scheme.
Pending challenges
The government faces critical tasks, many of which will need to be addressed in an electoral context that often complicates collaboration with the opposition:
- Exchange unification: It will allow the recovery of nearly 20 billion dollars necessary to finance imports in a country that projects growth of 5% in 2025.
- Reactivation of consumption: This depends on improving purchasing power and access to credit, a tool still underdeveloped in Argentina.
- Agreement with the IMF: The government seeks a disbursement of 15 billion dollars to allow an orderly opening of the exchange rate.
- Control of speculative financial investments: Prevent them from appreciating the Argentine peso even more.
- Development of strategic sectors: Hydrocarbons, gas, lithium, copper and mining must leverage the exports necessary to finance industrial growth.
- Transition towards an open economy: This implies balancing competitiveness, planning the reconversion of sectors not suitable for competing globally and promoting orderly foreign trade.
- Reduction of poverty and indigence: The goal is to bring them below inherited levels in December 2023.
Political perspectives
Everything indicates that La Libertad Avanza could obtain a resounding victory in the 2025 parliamentary elections, consolidating its position in Congress. This result would be key to advancing the structural reforms that the country needs to guarantee the sustainability of the model proposed by Milei.
Overcoming a first year with a devastating economic and social legacy was a monumental task. However, the real challenge will be to maintain the pace of reforms and continue setting the public agenda in a context of global uncertainty and internal resistance. As the president points out, the forces of heaven seem to be on his side. But depending on fortune will not be enough; Strategy and the ability to adapt to the unexpected will be decisive for the years to come.
* Economist, business consultant and former CEO Syngenta Latam Sur
by Antonio Aracre
