Support from the Argentine population for Milei collapses after the economy stagnates and unemployment grows

Two years after promising “the last bitter medicine” to cure decades of crisis, Argentine president Javier Milei faces growing popular frustration with the direction of the economy. Although inflation has plummeted and the poverty rate has fallen from 42% in 2023 to 32%, the country has entered a cycle of stagnation, with a drop in economic activity and an increase in unemployment.

The promise of recovery that seemed close at the end of 2024 lost strength throughout this year. Since April, the Argentine economy has shown a contraction, and real wages remain stuck at the same level as two years ago. “People are still struggling to make it to the end of the month,” says Nadina Casagrande, 22, who runs a small clothing business in La Plata. Milei’s voter in 2023, she voted blank in the last provincial elections. “I’m not excited anymore,” she says.

Dissatisfaction spreads among small business owners. Baker Pablo Miró reports that “people have been paying for bread with credit cards”, and Belén Aguilar, owner of a chocolate shop, announced the closure of the business after sales fell 50% this year. “It is no longer sustainable to maintain a physical store”, he laments.

The economic deterioration and allegations of corruption involving the president’s chief of staff and sister, Karina Milei, increased the government’s political wear and tear. In the September elections, the libertarians were defeated by the Peronists in the province of Buenos Aires, a decisive stronghold that Milei had won by a small margin in 2023.

The electoral setback caused capital flight and new pressure on the Argentine peso, partially contained after the announcement of a possible financial bailout from the US Treasury. Still, analysts warn of the risk of political paralysis if Milei is unable to expand his base in Congress in the legislative elections on October 26th.

“The government should remain stagnant or in recession until the elections”, assesses economist Martín Rapetti, director of consultancy Equilibra. “If he doesn’t get political traction after this, it’s hard to see a real recovery.”

Milei’s economic policy, focused on reducing inflation and strengthening the peso, helped contain prices, but made exports more expensive and harmed local industries. Small and medium-sized companies face annual interest rates exceeding 60%, while the government maintains salary and pension adjustments below inflation.

In the midst of the crisis, Milei is trying to regain popular support with specific measures, such as discounts for retirees and a moderate increase in social spending foreseen in the 2026 budget. In an interview last Sunday (5), the president once again asked for patience. “I never said it would be easy,” he said. “I ask Argentines not to give up, because we are halfway there.”