President Javier Milei’s government has brought inflation down sharply — from 211% a year in 2023 to 31% in 2025 — and locked in two consecutive years of fiscal surplus, something Argentina hadn’t seen since the first Kirchner administration nearly two decades ago. Yet his popularity has been sliding for months.

The drop isn’t down due to corruption cases involving members of his cabinet alone. It also reflects the toll of the deep fiscal cuts Milei has imposed, and continues to impose, on the Argentine economy.

The famed “chainsaw” is more than a strategy for shrinking public spending to keep inflation in check. It carries political consequences, too — and they are starting to wear thin.

What kind of economy did Milei inherit?

The consultancy firm Epyca noted in a recent report that Argentina ran a fiscal deficit every year from 2009 to 2023, except for a slight surplus in 2010.

“As we have seen in recent Argentine history, an economy that systematically spends more than it collects piles up debt or prints pesos, which puts pressure on the exchange rate and inflation and undermines its capacity to grow,” the analysts wrote.

“Overusing this tool removes the option of using it when........

© Buenos Aires Herald