In the midst of the collapse, Javier Milei took over with radical promises. They seemed unfeasible. Many bet on failure.

A year later, it's no longer about talk. It's about delivery.

Yesterday, another one came: the end of the fixed exchange rate — one of the most anticipated steps in the country's recent history.

The collapse : o that Milei inherited.

Argentina arrived in December 2023 with a scenario worthy of a war economy.

Monthly inflation of 25%, explosive deficit, two exchange rates, depleted reserves, shortage of imported products and blocked external debt.

The country operated in a dysfunctional system, with money printing to finance spending, price freezes and unsupported promises.

The weight was a fiction, and the State, a black hole. It was necessary to start over. (2/)

The toughest adjustment in decades.

The response came with unprecedented cuts: ministries closed, works halted, subsidies eliminated, hiring frozen.

The result? Public spending fell from 44% to 32% of GDP in less than a year.

Furthermore, the government stopped printing money to finance deficits — something that eroded the currency and fueled inflation. The Central Bank stopped financing the Treasury.

In 2024, the government will deliver 11 consecutive months of primary surplus. An unprecedented feat since the 2000s. (3/)

Inflation began to fall — even with the shock.

Many said that the adjustment would cause more inflation. But the data showed otherwise.

Monthly inflation plummeted: from 25% in December, to 2.2% in January and 2.4% in February. In March, it rebounded to 3.7%, driven by education and food.

Even so, the accumulated total over 12 months fell from 66% to 55%.

The fiscal shock is working. But the game is not won yet. (4/)

🪙 Yesterday, Argentina untangled its biggest knot: the exchange rate.

After years of distortions, the government announced the end of the fixed exchange rate — an essential condition for closing a new US$20 billion program with the IMF, which immediately released US$12 billion.

It was not just a financial agreement. It was the reconstruction of the country's monetary architecture.

Why? Because capital controls hindered everything: exports, investments, repatriation of profits, exchange rate predictability. And it forced the Central Bank to burn reserves to maintain a lie. (5/)

💱 Now the weight is (almost) free — and that changes everything.

The new regime adopts a floating exchange rate band between 1,000 and 1,400 pesos per dollar, adjusted by 1% per month.

The Central Bank only intervenes if the currency leaves the range. Otherwise, the law of supply and demand applies.

This means the end of the artificial shortage of dollars, the end of the false price table, the return of market logic.

With the support of the IMF, the peso regained its real value. Foreign trade became predictable again. And Argentines once again trusted the system. (6/)

And the world realized: country risk collapsed.

When Milei took over, the country risk was at 2,153 points — the level of a country in default.

In January, it fell to 746 points, the lowest in 5 years. It rose a little in March, with doubts about the agreement with the IMF.

But with yesterday's announcement, the downward trend should return.

Country risk is the barometer for global investors. And it shows: Argentina is no longer a lost cause. (7/)

Record trade surplus: the return of dollars.

With the exchange rate heading towards adjustment, the deficit cut and the economy deregulated, Argentina closed 2024 with a trade surplus of US$18.9 billion — the largest in history.

The energy balance alone generated a US$5.6 billion surplus, reversing years of dependence on imports.

This money was essential to replenish reserves and provide a basis for the new exchange rate regime. The country stopped burning dollars — and started accumulating them again. (8/)

Liberalism left the paper — and became a decree.

The government eliminated hundreds of regulations, removed bureaucratic constraints, dismantled import barriers and began the privatization process.

Public companies began to be prepared for sale. The licensing system was simplified. The private sector, previously treated as an enemy, once again took the lead.

This is the first time that a liberal agenda has been implemented with coherence, focus and speed. (9/)

🌾 The field has returned to investing.

Agriculture, which has sustained the Argentine economy for decades, has been freed from fiscal chains.

Retenciones (export taxes) were eliminated for sectors such as milk, chicken and pork. In other cases, there were cuts of up to 25%.

The government also began to dismantle the Impuesto PAIS, which penalized any transaction in dollars.

Result? Exporting became more viable. Producing became cheaper. And the countryside started hiring again. (10/)

🇺🇸 And in the midst of the trade war, a bold move.

While the US imposes tariffs of more than 100% on Chinese products, hitting Europe and Mexico hard, Milei wants to do the opposite.

He proposed a zero-tariff agreement for American products, covering more than 50 items that represent 80% of Argentine exports to the US.

The idea is clear: to transform Argentina into Washington's preferred partner in the Southern Cone. Trade openness in the midst of an era of protectionism. (11/)

GDP fell. But the country left the ICU.

In 2024, Argentina’s GDP fell by 1.7% — a direct reflection of the fiscal shock, the end of subsidies and the dismantling of price controls. This was expected. Milei warned in his inauguration speech: “there is no alternative to adjustment.”

In the first two quarters, the country experienced a technical recession. Consumption collapsed, inflation exploded and unemployment rose. The collapse was the price to pay for decades of populism.

But in the second half of the year, the curve turned. GDP grew by +4.3% in the 3rd quarter and +1.4% in the 4th. Confidence began to return, inflation fell, and the population could breathe again.

2024 was rock bottom. 2025 should be the beginning of recovery. (12/)

Poverty fell — without an increase in spending.

At the height of the crisis, 53% of Argentines were below the poverty line.

In the second half of 2024, the rate fell to 38%, according to INDEC — the lowest since 2022. And this without new social programs.

It was stability that stopped real wages from evaporating. Rice returned to the table. Bread stopped being a luxury.

But the challenge now is to make sure it lasts — because Argentina’s poverty line is sensitive to inflation. (13/)

Milei is not promising. She is delivering.

With unpopular cuts, technical measures and non-negotiable rhetoric, he dismantled the permanent crisis machine.

It destroyed historical distortions, restored fiscal credibility, released the exchange rate, and revived confidence.

There is still a long way to go. But for the first time in a long time, Argentina has a direction. And it is moving in that direction.

(14/)