On 19 November 2023, Javier Milei won the run-off election for the Argentine presidency. On 10 December 2023, he was officially sworn in as President. Now, three years on, it is time to take stock. This assessment is straightforward, as there are now so many facts and figures available that one can largely refrain from making judgements. The results speak for themselves and the message is clear.

Figure 1 shows the production indices for the economy as a whole, industry and the construction sector. For all indices, we have set January 2023 as 100, so that it is easy to track what has happened since Milei took office. This summer, overall economic output stood exactly at the same level as it had in January 2023. The particularly vulnerable yet crucial sectors of industry and construction are significantly below that level.

Figure 1

A breakdown by economic sector shows that the declines in industry and construction have been offset by increases in mining and raw materials extraction, financial services, and property and business services (Figure 2). Quantitatively, the first sector is likely to have been the most significant.

Figure 2

Whilst there was no progress in the real economy, there is widespread celebration that the President has succeeded in curbing inflation with his ‘chainsaw’ approach. This is incorrect. I have already set out in my latest detailed paper that it cannot possibly have been the President, who came to power in December 2023, whose policies caused the inflation rate to fall dramatically between spring 2024 and summer 2025 (Figure 3).

Figure 3

Nominal wage growth has also fallen significantly, almost in step with the inflation rate. However, this is entirely beyond the President’s control. Consequently, all the evidence suggests that it was the internal dynamics of the indexation mechanism linking wages and the inflation rate that ensured the external price stabilisation (the peak in commodity price rises in 2022 and 2023 had passed worldwide) could have such a rapid impact on the Argentine inflation rate.

Currently, the annual inflation rate still stands at over 30 per cent and has remained completely stable since mid-2025. The President is evidently doing nothing to bring down this very high inflation rate, which is in turn fixed by the indexation mechanism.

The fact that the government appointed by Milei did nothing to curb inflation is demonstrated with absolute clarity by the trend in interest rates (Figure 4). Interest rates were falling even before Milei took office, and afterwards, too, they continued to move in only one direction: downwards. However, falling interest rates cannot be used to combat hyperinflation.

Rather, it must have been the case that interest rates fell because the inflation rate fell.

Figure 4

Money market rates in Argentina currently stand at just over 20 per cent. There is no longer an official central bank policy rate, as the central bank decided in 2025 to switch to a monetary aggregate control system. Loan interest rates for businesses are usually indexed to the inflation rate and amount, for example, to 7.5 per cent plus the inflation rate, which works out at almost 40 per cent.

Nor are any positive impulses to be expected from the foreign trade sector. The real exchange rate of the peso has recently risen again to such a level that many speak of it being overvalued (Figure 5). Clearly, many Argentine companies facing competition from abroad are under considerable pressure or are going out of business (here is an example).

Figure 5

Conclusion

The ‘chainsaw experiment’ has clearly failed. Although Argentina no longer has a current government deficit, economic development has shown no positive prospects for the past three years. The manufacturing and construction sectors – which are crucial for the long-term development of any economy – have shrunk significantly. Unemployment has certainly risen sharply. However, this is not immediately apparent because many workers, following redundancy, turn to some form of self-employment. This phenomenon is sometimes referred to as ‘Uberisation’.

Nor has any progress been made in tackling inflation since the start of 2025. There ought at least to be clear evidence that the President is taking serious steps to move away from 30 per cent inflation. Interest rates are prohibitively high, meaning there can be no revival of investment on the part of businesses.

As the state has largely withdrawn, a viable economic policy framework would need to aim to create favourable investment conditions for businesses. This is certainly not the case. Milei, in keeping with his ideology, completely neglects the macroeconomic side of things. However, the fact that the state has withdrawn does not provide any positive impetus for businesses.