Since taking office in December 2023, Argentine President JavierMilei has implemented sweeping measures to shrink the state, cut spending and liberalize the economy. File Photo by Sergio Perez/EPA
A report from J.P. Morgan points to a “deep and surprising” recovery in Argentina’s economy under President Javier Milei, but warns that the future of his economic plan will depend on the outcome of the October legislative elections.
Since taking office in December 2023, Milei has implemented sweeping measures to shrink the state, cut spending and liberalize the economy.
According to the investment banking and research arm of the U.S. financial giant, Argentina has managed in just a few months to lower inflation, reach fiscal balance and strengthen its foreign reserves — after years of stagnation, crisis and heavy dependence on public spending.
“The country is undergoing a structural transformation with extraordinary potential, though not without significant risks,” economists Diego Pereira and Lucila Barbeito wrote in the report.
Monthly inflation fell to 1.6% in June, down from more than 25% in December. The government has posted a primary surplus equal to 1.1% of GDP so far this year, and the Central Bank’s reserves are beginning to recover.
Moody’s upgraded Argentina’s credit rating for the second time in 2025, and J.P. Morgan projected 2025 GDP growth at 5.5%.
The economic adjustment, however, has come at a significant social cost. The government has laid off public employees, cut subsidies and suspended state infrastructure projects. Despite improvements in macroeconomic indicators, social conditions remain fragile.
A recent poll by Zuban Córdoba found that 52.8% of voters plan to punish the government in October’s elections, while 38.3% intend to reward it. The survey also showed that 57.5% of Argentines hold a negative view of Milei.
According to polling firm Analogías, favorable opinions of the government declined by 2 to 3 percentage points in July. Milei’s approval rating dropped 4 points to 44%, while his disapproval rose to 50%, creating a net negative gap of 5.5 points, Perfil reported Wednesday.
Respondents were critical of Milei’s tone and communication style: 73% said they disagreed with it and 66% described it as “violent.”
Analysts and banks agree that without political support in Congress, the government’s economic course could weaken.
Economist Milagros Gismondi wrote on X that many companies are beginning to focus on boosting productivity, which she sees as a positive shift.
“Banks are back to being banks, and car dealers are thinking about how to produce more efficiently. That didn’t happen before, because everyone was worried about whether they could import, whether there would be energy or whether the dollar would spike,” she said.
Still, Gismondi noted that the private sector remains cautious. “They’re also waiting for the elections to see whether deeper reforms — such as labor or tax changes — move forward. If stabilization holds, next year we should finally start talking seriously about how to improve Argentina’s productivity,” she said.
If Milei fails to perform well in October’s elections, he could face difficulties passing key legislation, including political reforms, privatizations or potential constitutional changes.
The president currently governs with a fragmented Congress, and the legislative vote could either reinforce that dynamic or further weaken his bloc if his party, La Libertad Avanza, fails to retain or expand its seats.
