Eighteen months into Javier Milei’s self-described libertarian revolution, Argentina’s economy is producing a tale of two realities. Consumer price inflation, which peaked at a staggering 289% annually in early 2024, has fallen to approximately 54% on a year-over-year basis as of May 2025 — a decline that would have seemed implausible when the chainsaw-wielding economist took office in December 2023. Yet with the poverty rate hovering near 38%, the social cost of his shock therapy remains an open and politically volatile question.

The inflation retreat is the centerpiece of Milei’s economic case. Monthly price growth, which ran above 25% in December 2023, has decelerated to roughly 3.5% in recent months, according to Argentina’s national statistics agency INDEC. The International Monetary Fund, which noted earlier this year that Argentina’s fiscal consolidation had exceeded initial targets, revised its growth outlook for the country upward to 5.5% for 2025, citing stronger-than-expected export revenues and a recovery in private consumption. The peso, once in freefall, has stabilized under a crawling peg regime that Milei’s team introduced after lifting the most punishing capital controls.

The fiscal arithmetic behind the turnaround is striking. Argentina ran a primary budget surplus in 2024 for the first time in over a decade, trimming public spending by an estimated 5% of GDP within the administration’s first year. State subsidies were slashed, tens of thousands of public sector positions were eliminated, and entire ministries were dissolved. Bond markets have responded: Argentine sovereign spreads have compressed by more than 800 basis points since the administration’s first quarter, and the country successfully returned to voluntary debt markets with a $1 billion issuance in April 2025 at yields previously unthinkable for Buenos Aires. Emerging market watchers, who have been tracking a broader risk-off tone in global capital flows this summer, flagged the Argentina placement as a rare bright spot for developing-market debt.

The human cost of the adjustment, however, remains severe. The poverty rate, which surged to nearly 53% in the first half of 2024 during the initial shock phase, has since retreated but stabilized at around 38% — still far above the 40% pre-Milei baseline that his administration promised to dismantle. Real wages in the formal private sector have begun recovering, posting gains of roughly 8% above inflation in the first quarter of 2025, but informal workers — who account for nearly 45% of Argentina’s labor force — have seen far more uneven relief. Food insecurity indicators compiled by UNICEF remain elevated in greater Buenos Aires.

Milei’s supporters argue that stabilization was a precondition for any durable poverty reduction, and that the current trajectory mirrors historical recoveries following orthodox fiscal consolidations in Latin America. Critics, including several opposition governors, contend that the distribution of sacrifice has been inequitable and that social safety nets were dismantled faster than market incomes could compensate. The debate mirrors a broader global conversation about the limits of austerity-driven reform in economies with deep structural inequality. With midterm congressional elections scheduled for October 2025, the next few months of wage and poverty data may prove as consequential for Milei’s political survival as any macroeconomic indicator on his preferred spreadsheets.