The government of ultraliberal Javier Milei faces the worst moment at the helm of Argentina amid corruption scandals, a drop in popularity, and a downturn in economic and industrial activity.
Inflation, which had been the Casa Rosada’s main political showcase, has accelerated again. After reducing monthly inflation from double digits at the end of 2023 to around 2% per month, by 2025 price indices rose again between the end of last year and the start of 2026, reaching 3.4% in March this year.
The recent acceleration led Milei to publicly acknowledge economic difficulties. “The data is bad,” he said on social media.
At the same time, economic activity in Argentina contracted by 2.6% in February compared to January, with a cumulative drop of 2.1% over the last 12 months.
Perhaps the most worrying development is the decline in industrial production, which fell by 4% in February, accumulating an 8.7% drop over the last 12 months.
Economic plan
Paulo Gala, an economics professor at the Getulio Vargas Foundation of São Paulo (FGV-SP), said that Milei’s economic plan is “simplistic” and has not managed to fully reverse the economic situation he inherited.
“People no longer trust the peso [Argentine currency]. They dollarize [price contracts in dollars], in a way similar to what happened in Brazil before the Real Plan. With that, inflation accelerates again at the slightest trigger. Reducing the size of the State does not solve anything,” he said.
Milei’s government advocates shrinking the State, with spending cuts and fiscal austerity as measures to curb inflation and revive the economy.
The economist Gala assesses that Milei’s plan should not go too far, arguing that other measures would be necessary, such as instituting a new currency.
He also highlighted that the Argentine peso is overvalued, which, in his view, has destroyed the country’s industry.
“This plunge in manufacturing activity is fatal for the country because this sector is responsible for productivity gains, for technological advances. This industry’s data is very bad. This aggressive trade opening that Milei has been pursuing also destroys the little that remains of industry in Argentina,” he added.
For the specialist, the trend is that Argentina will become increasingly deindustrialized, focusing the economy only on the agro-export sector of raw materials.
“A recession scenario is not ruled out, and possibly a new exchange-rate crisis with enormous dollar-denominated debt,” analyzes Paulo Gala.
Argentina has been taking on new loans with international banks, in dollars, to shore up the peso.
Popularity
In addition to the difficult economic situation, recent corruption cases have contributed to the decline in the government’s popularity.
One example is the investigation into alleged illicit enrichment by Milei’s chief of staff, Manuel Adorni, who has had to explain luxurious trips and the purchase and renovation of properties allegedly incompatible with his income.
Opinion polls have recorded disapproval ratings above 60%, marking the worst figures since he took office at the Casa Rosada in December 2023.
The Atlas Intel poll from late April indicated a 63% disapproval of Milei, with 35% approval.
Corruption and economic performance are the determining factors for the decline in popularity.
According to Zentrix, 66.6% of the population believe that Milei’s pledge to fight corruption—an “anti-elite” promise—has been “broken.”
“Corruption emerges as the country’s main challenge, even among those who voted for the governing party in 2025, surpassing unemployment, inflation or wages,” says the polling company.
The Argentine political scientist Leandro Gabiati explained to Agência Brasil that Milei was elected very much on the anti-corruption discourse, which has been deconstructed over the mandate.
“This government has placed the corruption agenda as a state policy. When it is observed that there are cases involving some government officials, such as the chief of staff, who would be a kind of prime minister, that affects the government’s image, wears it down, and creates problems,” he explained.
At the same time, Gabiati says that the population recognizes the government’s achievement in reducing inflation, but notes that prices continue to rise.
“Obviously, this inflation, running about 30% to 40% per year, is a significant inflation. Reducing it would require more effort, from both society and the government,” says the expert.
But what has been working in Milei’s favor is the disorganization and the population’s disapproval of the opposition to the Argentine government.
“Does this mean the government will have problems in the 2027 presidential election? That’s still far off on the radar. The government has some problems it will have to solve now, but the opposition remains disorganized and not a clear political option for Argentine voters,” he assesses.
In a positive note for the government, the risk rating agency Fitch Ratings raised Argentina’s credit rating from CCC+ to B-, with a stable outlook, recognizing improvements in the country’s “fiscal situation” and external balance.
As a result, the Buenos Aires stock exchange is trading higher this Wednesday (6). However, for economist Paulo Gala, this does not change the overall picture of the Argentine economy.
Press
In this context, the Milei government has chosen the press as one of its targets. At the end of April, the government prohibited the entry of journalists into the Casa Rosada, affecting about 60 professionals who covered the Executive Branch in Buenos Aires.
Some broadcasters were accused of filming areas of the building without authorization, which media companies denied.
After criticism of the measure, described as a violation of freedom of the press in Argentina, the government reopened the Casa Rosada to the press this Monday (3), while still maintaining restrictions on movement at the country’s seat of power.
