The election of Javier Milei in late 2023 produced two simultaneous narratives. The first was the radical one: dollarization, central bank closure, full deregulation. The second was a more orthodox stabilization: large fiscal adjustment, exchange-rate management, gradual capital-account opening. The first never quite happened. The second largely did. Two and a half years in, Argentina has lower inflation, a stabilized peso, and a meaningful reserve buildup — without the institutional rupture the dollarization plan would have required.
Key takeaways
- Monthly inflation has fallen from double digits to low single digits.
- The official-blue chip spread has compressed materially.
- Reserves have rebuilt by tens of billions.
- Dollarization is off the table — and that is fine.
What actually worked
The fiscal adjustment was the engine. Milei's team ran a primary surplus that few in Buenos Aires thought was politically achievable, and they held it through two budget cycles. The exchange-rate framework — crawling peg followed by partial unification — bought time for that fiscal adjustment to feed through to expectations.
- Fiscal anchor. Primary surplus, sustained.
- Crawling peg. Bought time, then was eased.
- Capital controls. Loosened gradually, not abruptly.
- IMF. Re-engaged with a credible program.
What this means for the rest of the cycle
The stabilization is durable enough to invest behind. Local-currency bonds are now investable for foreign accounts, the equity market has rallied off historic lows, and the real economy is recovering from the sharp 2024 contraction.
What could go wrong
A midterm political setback that forces fiscal loosening.
What dollarization would have cost
Institutional rupture without measurable gain over what was actually achieved.
Macro path
| Indicator | End-2023 | Mid-2026 |
|---|---|---|
| Monthly CPI | ~25% | ~2.5% |
| Primary balance | -3% GDP | +1.5% GDP |
| Net reserves | negative | +$20bn |
Argentine stabilization happened through orthodox tools, not radical ones — and it should be priced that way.
Frequently asked questions
Is it durable?
Conditional on the midterm political cycle, yes.
Does dollarization come back?
Unlikely — the political case has weakened as stabilization succeeded.
Is local-currency investable?
For real-money accounts, yes — for the first time in a decade.
The bottom line
Milei's macro outcome is the orthodox one. The radical plan was never the binding constraint. The reward is a stabilized economy that is, finally, investable.
