Argentina Under Milei: Miracle After 70 Years of Crisis

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At the beginning of the 20th century, Argentina was once one of the richest countries in the world – with GDP per capita equal to the US and Western European countries at that time. However, that glory has gradually faded after more than 7 decades of hyperinflation, recessions, and chronic public debt crises. The long period immersed in stagflation has caused Argentine people and investors both domestic and foreign to gradually lose faith in the government, Central Bank, and this economy.

However, a new chapter in Argentina's turbulent history is perhaps being written under President Javier Milei: with bold economic reforms to address public debt, inflation, and economic growth issues. Despite initial skepticism, Milei's policies have begun to show effectiveness in recent months. Inflation, which once peaked at > 25% m/m, has sharply dropped to 2.7% m/m in October 2024, demonstrating the effectiveness of fiscal tightening measures and structural reforms.

Investors are starting to pay attention to Argentina, with new confidence boosting the stock market and increasingly optimistic GDP growth forecasts. But more importantly, Argentina's current situation may provide valuable lessons in managing public debt and controlling inflation - two major issues that most countries, including the US and Europe, are facing.

Therefore, this week's Macroeconomics column of Viet Hustler summarizes over 100 years of ups and downs in Argentina's economy – and recent reforms.

In the conclusion, Viet Hustler will draw connections to solutions for addressing the US public debt problem and current global economies.

Disclaimer: This article may contain many subjective opinions of the author and does not represent the opinions of the organizations the author is working for – and is also not investment advice!