Argentina is facing yet another financial crisis. Washington has announced major initiatives aimed at helping to shore up the peso. The question is whether the radical reforms undertaken by President Javier Milei to overhaul the Argentinian economy over the past two years, since his election, will continue to take hold and endure. 

So far, his aggressive reforms have resulted in cutbacks in government debt, spending, and programs, leading to a budget surplus and sharp declines in inflation. Emerging from a 2024 recession, economic growth is now projected to increase at a 5.5 percent rate in 2025. Still, since President Milei’s election in 2023, the unemployment rate has increased. Nonetheless, free market advocates say that Milei’s initiatives should eventually turn the country around. Adhering to these reforms can put Argentina on the path to long-term, stable economic growth, a goal the country has not achieved in decades. 

Washington and Buenos Aires have common strategic interests in the Western Hemisphere as democracies. The two countries currently enjoy unusually positive relations, thanks to the personal relationship between Presidents Milei and Donald Trump. 

Recent election results in the Buenos Aires province create questions over whether Milei’s bold programs will continue to receive support at the ballot box. The unemployment rate declined only slightly in the last quarter. Still, voters might well be nostalgic for the past. Argentinians learned over decades to live both with Peronism’s rampant inflation and its generous government subsidies and programs. Under Peronism, Argentinians became accustomed not only to constantly rising prices but also to guarantees of job security, free healthcare, subsidized pensions, tuition-free universities, and an array of generous subsidies for transportation, utilities, housing, bread, milk, and cooking oil. 

These programs became deeply embedded in the Argentinian social fabric over the decades. The cost of publicly financing these generous services for Argentina, however, has led to nine sovereign debt defaults, chronic severe inflation, persistent deficits, and weak, inconsistent economic growth. Argentina is the IMF’s biggest debtor. Over the last 70 years, the International Monetary Fund (IMF) has bailed out Buenos Aires

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