Four takeaways from President Javier Milei's first year

Argentina's President Javier Milei wasted no time giving effect to his election promise of taking a chainsaw to public spending to tame inflation and erase the troubled economy's budget deficit.

Within less than a year of taking office last December, the self-declared "anarcho-capitalist" leader's austerity programme started reaching some of its intended goals.

But it came at the cost of rising poverty that has seen even the International Monetary Fund express concern.

Four takeaways from Milei's first year in office:

The 'mole' within

Milei had defined the state as a bloated "criminal organisation" that must be limited to managing macroeconomics, security and foreign relations.

"I love being the mole within the state... the one that destroys the state from within," he said in June.

Milei halved the number of government ministries, merging some and shuttering others altogether – among them the Women, Gender & Diversity Ministry

He halted public works, closed state news agency Télam and the National Institute Against Discrimination (INADI), and fired or ended the contracts of more than 33,000 public employees.

The president is also working to privatise as many state-owned enterprises as he can.

Chainsaw

Milei wielded a chainsaw during the election campaign as a metaphor for his cost-cutting drive. He was not exaggerating.

The month after he took office and began implementing harsh austerity measures, Argentina produced its first monthly budget surplus in nearly 12 years.

Inflation, the bane of Argentines' existence for years, has declined from 25.5 percent per month in December 2023, when he took over, to 2.7 percent in October 2024 – the lowest level in three years.

The year-on-year figure remains one of the world's highest however, at 193 percent.

But the impact of his spending cuts has been brutal.

Poverty rose to 53 percent of the population in the first half of 2024 – up 11.2 percentage points under Milei.

Falling wages and pensions caused a crash in domestic consumption, plunging the country into a deep recession.

Milei insists the worst is over, despite large debt payments pending in the first half of 2025.

Alejandro Reca, CEO of San Ignacio, a company that produces Argentina's famous sweetened condensed milk, dulce de leche, hailed what he saw as an improved investment climate.

"What changed is what was missing: stability and the possibility to plan into the future," he told AFP.

Domestic battles

Milei took office with a minority in Congress, but managed, after a long and vitriolic battle, to pass many of his state reform and cost-cutting projects with backing from centre-right parties.

Online, the president has been engaged in a gloves-off confrontation with anyone who disagrees with him: trade unionists he describes as "crooks," prosecutors as "degenerates," journalists as "microphone criminals" and political opponents as "rats."

He has faced numerous mass demonstrations since taking office, with students and professors, pensioners, doctors and scientists protesting his budget cuts, privatisations, veto of pension hikes and perceived downplaying of dictatorship-era crimes.

But the protests have been muted compared with the rioting that forced then president Fernando de la Rúa to flee Argentina by helicopter in 2001.

And Milei's approval ratings, while having fallen over the year, have held up relatively well at nearly 43 percent, in a poll published by Clarín newspaper on December 2.

Foreign friends

Diplomatically, Milei has aligned himself with the hard right, calling for the creation of an "alliance of free nations" including Argentina, the United States under president-elect Donald Trump, Italy under Giorgia Meloni, and Israel and Prime Minister Benjamin Netanyahu.

The members of such an alliance, he said, would be the "custodians of the Western legacy," threatened by "the cultural hegemony of the left."

Milei was the first foreign leader to meet Trump after his November 5 election victory at his Mar-a-Lago estate and has attended meetings of far-right groups around the world.

In the last two months, he has hardened his position on the global stage: sacking his foreign minister for a UN vote in favor of lifting a six-decade US embargo on Cuba, opposing initiatives on Indigenous rights and the protection of women, and withdrawing from the COP29 climate summit.

At the G20 Leaders Summit in Rio in November, Milei's Argentina did not block the final declaration but spoke out against some of its provisions, including stepped up state intervention to combat hunger.