Argentina is counting the cost of its turn to populist President Javier Milei, as economists and industrialists warn of a deepening crisis. With midterm elections approaching on 26 October, the country faces a potential devaluation of the peso, which has been kept artificially high to control inflation. The policy has left the currency overvalued and reserves depleted, stalling the economy as consumers turn to cheap imports.
Luciano Galfione, a textile industrialist, says his 75-year-old family company is experiencing 'the worst moment in its history'. Since Milei took office, Galfione has laid off almost 50 workers and suspended 45 more as consumption slumped. Between December 2023 and July 2025, 18,000 businesses have closed and 253,800 registered jobs have been lost, according to the Centre for Argentine Political Economy (CEPA).
Milei's government has reduced or scrapped tariffs, leaving heavily taxed local industries at a disadvantage against Chinese imports. 'It's the perfect storm,' says Galfione. 'If he devalues the currency, inflation will soar. For now, his only achievement is containing it – at the cost of a major recession.'
Milei's populist experiment now faces a defining moment, watched closely by politicians including Donald Trump, Giorgia Meloni, Viktor Orbán and Nigel Farage. Trump has offered a $20bn (£15bn) currency lifeline to prop up Milei and the peso. Until recent months, Milei's approach – involving extensive privatisations and deep public spending cuts – had won plaudits from the IMF for helping to bring inflation under control.
However, financial markets have lost confidence after a shaky result in provincial elections and a series of corruption scandals. Only massive financial intervention by Trump has averted a full-blown currency crisis. The situation raises wider questions about the appeal of charismatic populists who offer simple answers in today's complex global economy.
