Argentina Records Lowest Inflation in 4.5 Years as Milei’s Reforms Take Effect

Argentina’s monthly inflation rate dropped to 2.2% in January, marking its lowest level in four and a half years, according to INDEC, the national statistics agency. This milestone represents a significant victory for President Javier Milei, whose bold economic reforms continue to reshape the country’s financial landscape.

The decline from 2.7% in December extends a four-month streak in which inflation remained below 3%, a remarkable turnaround for an economy that was previously battling triple-digit inflation.

Milei’s Economic Overhaul: From Crisis to Stability

For the first time in two years, Argentina’s year-on-year inflation fell below 100%, coming in at 84.5%. This is a stark contrast to 211.4% a year earlier and 117.8% at the end of 2024, underscoring the effectiveness of Milei’s economic shock therapy.

Upon taking office in December 2023, Milei made tough decisions, including a 52% currency devaluation, which initially sent inflation soaring to 25.5%. However, his fiscal discipline strategy, which included:

✅ Cutting public sector spending (33,000 jobs eliminated)
✅ Halving the number of government ministries
✅ Vetoing automatic inflation-linked pension increases

Javier Milei waves a chainsaw during a campaign rally in San Martin, Buenos Aires province, Argentina in September 2023 © LUIS ROBAYO / AFP

…has now dramatically slowed inflation and put Argentina on the path to financial recovery.

Economic Stability vs. Short-Term Hardships

Despite criticism over job losses and reduced purchasing power, Milei remains steadfast in his belief that short-term sacrifices will lead to long-term economic prosperity. Economy Minister Luis Caputo reaffirmed this on X (Twitter), celebrating the “stabilization and disinflation process.”

Last year, Argentina recorded its first budget surplus in a decade, a major milestone signaling that Milei’s austerity-driven economic realignment is working.

Looking Ahead: Economic Rebound in 2025?

The government projects 5.0% GDP growth in 2025, as economic stabilization sets the stage for investment, job creation, and recovery. With inflation slowing faster than expected, Milei’s vision for a freer, more competitive economy is gradually becoming reality.

🔹 Argentina is turning the page on its inflation crisis.
🔹 Milei’s reforms are delivering results.
🔹 The road ahead looks increasingly promising.