The interesting point is this. The early results are encouraging. For January, the country reported a budget surplus of $589 million, the first time the government had managed to collect more money than it spent over the course of a month since 2012. That was largely the result of tough spending cuts imposed by the president. The price of Argentinian bonds, traditionally not the safest of assets, has rallied to a four-year high as the markets start to warm to the new administration, and the peso, which Milei devalued sharply on taking office, has started to recover as well. The S&P Merval Index that includes Argentina’s largest companies has almost doubled over the last six months, rising above 1,200 at the start of February, although it has fallen back a little since then. True, there is still plenty of bad news. Overall output is still falling at an annualized rate of over 3 percent, and inflation is still above 140 percent, while retail sales fell 28 percent in January, as the impact of the shock therapy took its toll. Even so, Milei is still in power, and the signs are his reforms may soon start to work. In reality, Argentina was in such a dire state that it won’t take very much to improve the performance of what remains an economy rich in natural resources and human talent. And if Milei can turn the country around, Argentina may yet turn into an unlikely beacon of free market liberalism — and the place where the relentless growth of the state finally met its match.
