New Numbers in Milei's War on Inflation
May Hits an Eight-Month Low

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On June 11, Argentina's statistics agency INDEC reported that the consumer price index rose 2.1% in May from the month before. Down from 2.6% in April and below market forecasts, it was the lowest reading in eight months (since the previous August). Year on year the figure is still a steep 33.2%, yet next to the inflation that surged to 211% at the end of 2023, it can look like the data of a different country. Eighteen months after Milei's government declared it would fix the public finances through shock therapy, the main indicators have indeed moved. How firm the footing of that recovery is, though, remains a separate question.

The Arc of Stabilization, in Figures

According to INDEC, real GDP grew 4.4% in 2025. On the fiscal side, the country secured a primary surplus of 1.4% of GDP and, with it, two consecutive years of fiscal surplus for the first time since 2008. Driven by shale development at Vaca Muerta, Argentina's crude oil output topped a record 840,000 barrels per day, and the country has begun turning into a net energy exporter. Poverty in the second half of 2025 stood at 28.2%, the lowest since 2018.

The IMF has welcomed the progress on stabilization as inflation has slowed sharply. The central bank that Milei pledged at his inauguration to abolish still stands, but the peso has shifted to a more flexible managed currency band, and a sharp slide against the dollar has, for now, been avoided.

Structural Risks Beneath the V-Shaped Rebound

Monthly inflation falling into the 2% range is real progress. But 2% a month, sustained, still implies an annual pace in the 25-30% range. A monthly figure that looks tame yet adds up to more than 30% a year is exactly the hard part. Set against its neighbors, Argentina remains conspicuously high.

The deeper challenge is the external debt stacked up for 2026. The government is said to face more than 20 billion dollars in repayments this year alone, and the financing leans heavily on IMF and US support and private rollovers. If the export earnings that underpin those payments—chiefly farm goods and oil—waver with global commodity prices or drought, the premise of stability wavers too.

And the squeeze on public spending falls hard on pensioners and users of public services. The Catholic University of Argentina (UCA) notes that much of the improvement in the poverty rate is a statistical effect of slower inflation, not necessarily a rise in incomes themselves. Critics keep pointing to social fractures widening in a place apart from the improving indicators.

A 'Milei Model' Weighed Across South America

Argentina's experience is watched with mixed feelings around the region. Left and centrist governments in Chile, Colombia and Brazil have observed what an austerity-first approach asks of a society in return. Meanwhile Abelardo de la Espriella, Colombia's president-elect after winning the June 21 runoff, has pledged to shrink the size of the state by up to 40%, and Argentina's record looks set to become a reference point in that debate more and more often.

Whether the numbers from Milei's second year can be exported as a 'success model,' though, hinges on their durability over the next year or two.

The Author's View

What strikes me is the weight of the sentence 'the numbers got better.' A monthly 2.1%, GDP of 4.4%, poverty at 28.2%—each is bright on its own, yet the reality that 2% a month compounds past 30% a year does not change. An annual rate in the 30s is also what Argentina once called 'stability.' Depending on where the baseline sits, the same number can look entirely different.

Even so, fiscal surplus and energy exports advancing at the same time carries a different scent from the short-lived calms of the past. The question is how far that dividend reaches pensioners and workers. Beyond the glossy headlines, I want to follow the story to the lives of those carrying the pain.

Glossary

A primary balance is the gap between revenue and spending excluding interest payments. A primary surplus means that, setting aside interest on its debt, the state's household accounts are running in the black. Vaca Muerta (Spanish for 'dead cow') is one of the world's largest shale oil and gas formations, spread across west-central Argentina, and one of the leading forces behind the country's recent economy.

An annual inflation rate in the 30s is also what Argentina once called 'stability'—the same number can look entirely different depending on the baseline.

※ This article is the author’s commentary based on public information. Please confirm the latest figures, dates and procedures with governments and primary sources. Quotations are kept minimal and sources are cited.