After a fierce election, libertarian Javier Milei is the new president of Argentina. The challenging phase is about to begin: handling economic crises.
A recession is imminent, if not already here, savers are fleeing the peso, and inflation is at 143%. Net foreign currency reserves are also severely negative. A significant devaluation of the peso is expected, and 40% of Argentines are living in poverty.
With approximately 56% of the vote against competitor Sergio Massa’s 44%, Milei, who is promising economic shock therapy such as closing the central bank and dollarization, prevailed in Sunday’s second-round runoff election.
Milei now faces the huge challenge of turning around the economy once he takes office on Dec. 10. Failure could lead to the already embattled country suffering a tenth sovereign debt default, poverty climbing and possible social unrest.
“It is an economy that is in intensive care,” said Miguel Kiguel, a former undersecretary of finance at the Economy Ministry in the 1990s.
Argentina’s high inflation rate creates huge distortions in markets and for consumers, with prices changing weekly. A central bank poll of analysts forecast 185% inflation by the end of the year.