After taking office on December 10, Argentine President Javier Miley implemented drastic measures to stabilize the country’s economy. During his campaign, he warned voters that his “shock therapy” approach would be painful, and this prediction proved to be correct. Consumer price inflation has accelerated significantly since then, with prices up 71% through February and 276% year-over-year. This rise in prices can be attributed to Miley’s decision to lift price controls, devalue the currency and reduce subsidies that previously kept transport and utility bills affordable.

While Wall Street investors reacted positively to Miley’s reforms and drove Argentine bond prices higher, the general population was hit hard by the economic fallout. Consumer spending has fallen sharply as inflation erodes wages and pensions. As a result, Argentina has now entered its sixth recession in the last decade. Miley defends his aggressive approach by saying that it is necessary to undo the damage done by his predecessors. He blames them for the country’s poverty rate, which is now approaching 42%, a significant increase from 26% in 2017 and slightly below the peak during the Covid-19 pandemic.

By Samantha Johnson

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