In Buenos Aires, Argentina’s libertarian president, Javier Milei, hinted at a prospective agreement with the International Monetary Fund (IMF). During his annual congressional address, Milei maintained an optimistic tone regarding his economic reforms after a contentious first year in office riddled with controversies. While steering clear of new policy announcements, Milei promised that in the coming days, he would seek Congress’s endorsement for a new pact with the IMF, even though discussions with the organization are still ongoing.
Milei revisited themes from his 2023 presidential campaign as Argentina approaches crucial midterm elections in October. He touted a shift from hyperinflation worries to aspirations for long-term economic stability. Highlighting his administration’s achievements, he noted the decrease in the monthly inflation rate, which dropped from 26% in December 2023 when he took office to just over 2% by January, while the country climbed out of recession.
“We have transitioned from being a global laughing stock to being an unexpected protagonist,” Milei declared. Tech mogul Elon Musk, who brandished a chainsaw Milei gifted him at a recent event in Washington, has cited the Argentine president’s methods as motivation for his own aggressive overhaul of American bureaucracy. “The world’s eyes are now on Argentina as they are on Elon,” Milei remarked.
On trade matters, Milei announced Argentina’s potential exit from the Mercosur bloc to secure a free trade agreement with the United States, showcasing another move to align with the Trump administration and depart from Argentina’s previous international loyalties. “To seize this historic opportunity, we must consider flexibility, even if it involves leaving Mercosur,” Milei asserted.
Milei dangled the prospect of an IMF deal in his speech but refrained from providing specific details about the agreement with the Washington-based financial institution. His government has long pursued this deal to lift Argentina’s stringent capital and currency controls, aiming to benefit from Milei’s economic policies, which in 2024 delivered the first fiscal surplus in 14 years.
The president emphasized that a financial injection from the IMF would bolster reserves at the central bank, preventing a potential peso run and facilitating Argentina’s quest to dismantle capital controls by year’s end. “This new agreement will provide us with tools to establish a more liberated and efficient exchange system, draw investments, and consequently lower inflation, boosting growth and employment,” he told Congress.
Foreign businesses view Argentina’s currency controls, which set an official exchange rate and limit dollar access, as the main barrier to investment. The IMF has been contemplating additional financial support for Argentina, its largest debtor, with a cautionary stance on the sustainability of Milei’s austerity measures. The organization has yet to comment publicly.
Milei’s address portrayed his achievements as victories for Argentinians, although a boycott by the left-leaning opposition Peronist party, Unión por la Patria, left the legislative chamber sparsely populated. The Peronists hold significant shares of seats in both houses compared to Milei’s party, La Libertad Avanza. Despite opposition hostility, Milei has largely maneuvered around Congress, leveraging executive powers to deregulate industries, reduce government employment, cut public projects, and limit trade unions, among other measures.
The political opposition was further inflamed when Milei recently bypassed the Senate to appoint two Supreme Court justices by decree, one of whom faced accusations of money laundering, intensifying criticism of overreaching executive power. The midterm elections in October 2025 are pivotal, offering Milei a chance to enact more changes without concessions, though it might lead to increased authoritarianism.
Meanwhile, Milei has recently faced the greatest turmoil of his tenure due to promoting a cryptocurrency that soared after his endorsement only to plummet, leading to numerous criminal complaints and impeachment calls. Federal prosecutors are investigating possible fraud and misconduct. However, Milei omitted any mention of the crypto scandal in his extensive speech.
