How Milei Defused Argentina's Hyperinflation Bomb

The December 2026 issue of Reason explores Argentine President Javier Milei's accomplishments and what is yet to be done.

Argentina was approaching monetary detonation. Its Treasury could not finance its deficits voluntarily, its central bank was effectively insolvent, and monthly inflation was accelerating above 12 percent.

That was just three years ago. Today, monthly inflation has fallen below 2 percent, sovereign spreads touched eight-year lows in July, and the central bank's gross reserves reached their highest level since 2019 in September. This is one of the most remarkable disinflations of the modern era to have occurred without dollarization, a currency board, or a new currency. Javier Milei did not merely slow the rate at which prices were rising; he dismantled the fiscal and monetary mechanism that was driving Argentina toward hyperinflation.

But as the events of late 2025 showed, that achievement remains vulnerable. A stabilization can be economically coherent and still be politically mortal. Argentina has restored a substantial degree of public sector solvency, but it has not yet made that solvency independent of the next election. … [Subscribe to continue reading]