Why Javier Milei’s inflation ‘miracle’ in Argentina is more of a mirage

When Javier Milei took over as president of Argentina in December 2023, monthly inflation was 25.5%. The annual rate for that year was 211%. Now it has plummeted.

Milei, a rightwing populist famous for wielding a chainsaw on stage to make a point about fiscal conservatism, made cutting inflation a central part of his campaign.

The latest figures put monthly inflation in April at 2.6%, and 32% for the year. While this is still very high and behind only Venezuela, South Sudan and Iran, it’s well below the runaway hyperinflation of a few years ago.

Although the decrease has stalled somewhat in recent months, Milei continues to boast of his ability to keep price increases down – and insists his goal is still 0% inflation. He’s won conservative admirers around the world who see his policies as a blueprint for cutting inflation.

And yet economists like Can Cinar warn that Milei’s battle against inflation is more of a mirage than a miracle.

“On paper, it looks quite good,” Cinar says on the latest episode of The Conversation Weekly podcast, “but the bigger picture is that the economy is being undermined. It’s being hollowed out.”

Cinar, who recently wrote a book about populism and economics in Argentina, explains how Milei’s government managed to cut inflation by deliberately suppressing people’s wages, and the stark impact these policies are having on Argentinians.

Listen to the interview with Can Cinar, an honorary visiting researcher at City St George’s, University of London, on The Conversation Weekly podcast, or read an article he wrote about why Argentina’s inflation “miracle” is a warning to the world, not a blueprint.

This episode of The Conversation Weekly was written and produced by Mend Mariwany and the executive producer was Gemma Ware. Mixing by Eleanor Brezzi and theme music by Neeta Sarl.

Newsclips in this episode from Neura Media and NBC News.

Listen to The Conversation Weekly via any of the apps listed above, download it directly via our RSS feed or find out how else to listen here. A transcript of this episode is available via the Apple Podcasts or Spotify apps.

Can Cinar is also affiliated to SKEMA Business School in France.