The libertarian president Javier Milei works wonders in Argentina: inflation in this country dropped from 300% to only 11% in just a few months

Argentina was, over time, a country with bankrupt governments, economic collapses and inability to pay debts. However, incredibly, there are signs that – against all odds – the bold and free-market reforms of its libertarian president, Javier Milei, are starting to work.

With inflation falling and interest rates falling, Milei is already proving that the global leftist economic establishment – ​​addicted to bigger government and endless deficits – is wrong. In Argentina, inflation dropped from 300 percent to only 11 percent and Milei predicts that it will drop even more, writes The Telegraph.

Last week, Milei announced that the country recorded its first quarterly budget surplus since 2008, a modest 0.2% of GDP, but still an amazing achievement in such a short period of time, especially for a country that recorded deficits in 113 of the last 123 years.

Then, the central bank, which Milei has not yet managed to abolish as promised, reduced interest rates for the third time in three weeks. Although they are still at a staggering 50 percent, this will begin to ripple through the economy very soon. Investors started to notice.

According to economic data, the peso was the world’s best-performing currency in the first quarter of this year, and bond markets are also rising.

It is possible that the situation will improve in the following months. With stabilized prices and a rising currency, investments should start flowing again in a country rich in natural resources and hypercompetitive in terms of wage costs.

If Milei can follow through on his promise to unlock the country’s vast oil and shale gas reserves – using technologies that have proven safe and successful in the US – then the economy might just start to explode.

In this case, Argentina would defy a global economic establishment dependent on bigger government, more regulations and growing deficits.

When Milei was elected, he was rejected as a madman who would be removed from office in a few months, if not weeks. Proving that this narrative was wrong, he would show that free market reforms are far from impossible.

So how is he about to deliver such a powerful shock to outdated economic orthodoxy? In essence, he had three big correct decisions.

First of all, even without a majority in parliament, he was ruthless. Entire government departments were shut down overnight, regardless of the immediate consequences. The Ministry of Culture was abolished, as were the anti-discrimination agency and the state-owned news service. Only last month, he revealed plans to fire another 70,000 state employees.

Milei did not try to gradually cut, control budgets or make it easier for people to leave with early retirement or freeze employment. Instead, as he promised, he cut with the “chainsaw” from the state machinery, obtaining huge savings in the process.

Then he was emboldened. The president massively devalued the peso on the first day, assuming the financial impact in advance, and then eliminated rent control, price restrictions and state subsidies. It reduced workers’ rights, reducing maternity leave and severance pay, and allowed companies to fire workers who went on strike.

He eliminated fuel subsidies, even if this meant a temporary increase in inflation. Of course, there was some short-term pain, but the results are now becoming apparent.