Argentina’s recession ends as Trump and Musk applaud Milei’s budget slashing spree
Sideburn success… Argentina officially exited its recession, with new data showing the country grew its quarterly GDP for the first time in nearly a year. President Javier Milei has been on a budget slashing spree since he took office a year ago, and the government’s now making more than it spends for the first time in 16 years. Argentina’s monthly inflation is down to a four-year low, and the IMF predicts the country’s annual inflation will fall from a peak of 211% last year to 45% in 2025 (for reference: US inflation’s under 3%).
Caveat: A better balance sheet may not mean better lives for Argentines. The poverty rate spiked to 53%, up from 40%, in the first half of the year as Milei cut government programs.
Still: Milei’s thrifty strategy is being applauded by a new wave of world leaders that say they want smaller governments and bigger biz.
Imagine the group chat… POTUS-elect Trump, Tesla CEO Elon Musk, and Milei frequently gas each other up on the global stage. Trump has said Milei can “make Argentina great again,” while Musk has praised the self-described “anarcho-capitalist” and said his companies plan to invest in the country. Milei promised to take a chainsaw to gov’t programs when he entered office: he cut the number of ministries in half and planned a big sell-off of state-run companies like Aerolíneas Argentinas.
America’s looking to the other America… Trump and Musk agree with Milei’s approach: Trump tapped Musk to co-lead the Department of Government Efficiency, which Musk said could recommend slashing as much as a third of federal spending. Still, experts say it might not be feasible to replicate Milei’s extreme pare-down in the US because Argentina’s government is notorious for decades of overspending and mismanagement.