The Argentine Peso: Can Milei Reverse Course?

Published: Sunday, July 19, 2026

by Liam Page

As Argentina makes its World Cup march, its economy at home continues to be one of the biggest stories unfolding. In particular the currency of Argentina, the Argentinian Peso, has been on a decline for most of the 21st century. Since 2001, The Argentinian Peso has lost 99.6% of its value.

 
2001 started the most recent peril to their economy. Argentina defaulted on nearly $132 billion USD worth of public debt. Multiple bouts of high inflation rates degraded the value of the Argentinian peso as well as many Argentines' savings accounts. Inflation became so bad that it was more worth it for people to finance purchases rather than pay for them outright.

 
During the COVID-19 pandemic, the economy dropped from $524 billion USD in 2018 to $389 billion USD in 2020. In the wake of the pandemic, over half of Argentinian people lived in poverty as recently as 2024 as stated by the National Institute of Statistics and Censuses. After the pandemic, Argentina's political climate shifted to the right. This political shift culminated with Javier Milei stepping into office in 2023. Milei began to change economic course immediately, ending many government programs that contributed to overspending and excessive borrowing.

 
In Milei's opinion,  Argentina’s economic issues are rooted in the government's overregulation and intervention in the country's industries. In a speech from 2024, Milei told a crowd at an Industry Day event that "the only thing that is harmful is having an elephantine state mounted on your backs" (argentina.gob.ar). Milei advocates for foreign investment and has revoked many subsidies for industries such as energy and housing, allowing expanded free-market competition. Milei merged or eliminated government offices that he felt were slowing down processes in the government. 

 
Milei's policies initially made the Argentinian GDP shrink and inflation rise. However, as Milei has settled into his term, annual inflation has gone from 211%, from when Milei took office,  down to just 31% in 2025 (Americas Quarterly). Shock therapy policies have proven to be effective in the short term, but long-term stability will be the question behind the Argentine economic recovery project. If either Milei or an ideological successor can continue the work being done, then perhaps Argentina can reclaim its former standing as one of the wealthiest countries on the South American continent.

 

Argentina was once one of the richest countries in Latin America. Buenos Aires was referred to as the "Paris of South America." Since the Great Depression, Argentina has been in repeated cycles of economic growth and crisis for the better part of a century. Despite cutting inflation down to 34% annually, the Argentine peso is still weak due to the many years of high inflation and currency depreciation. It will take more than a snapshot of one president’s term to see if Argentina can hold this period of fiscal discipline and economic stability.

 

For more information reach out to Liam Page at liam.page@student.shu.edu 

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