Argentina Economy 2026: Inflation, Poverty After Milei’s Cuts

Rio Times · Guides

Two and a half years into the harshest spending cuts in Argentina’s modern history, the numbers have turned. Inflation is running below 2% a month, poverty is at a seven-year low, the currency controls are gone and the economy is growing again.

What has not turned is the pay packet: wages have stopped falling, but they have not caught up.

Where Argentina stands in August 2026

Javier Milei took office in December 2023 promising to cut public spending to the bone, kill inflation and get the state out of the economy. Whatever you think of the method, the headline numbers have moved a long way.

Prices rose 1.9% in June 2026, the lowest monthly figure in ten months, and 33.5% over the previous twelve. That is still high by any normal standard – Turkey was at 32.1% over the same period – but in 2023 Argentine prices rose 211.4% in a single year, and in December of that year they rose 25.5% in a single month.

The economy contracted 1.7% in 2024 as the cuts landed, then grew 4.4% in 2025. The IMF now expects about 3.5% growth in 2026, one of the faster rates in Latin America. Unemployment was 7.8% in the first quarter, up from 5.7% when he took office.

Poverty is the number that has moved furthest. INDEC, the national statistics office, reported 28.2% for the second half of 2025 – about 13.5 million people, and the lowest reading since early 2018. When Milei was sworn in it was 41.7%, and it went above 50% in his first six months before falling back.

The peso: what it costs and where you can buy it

This is where most outdated guides will get you into trouble, because the rules changed completely in April 2025.

For years Argentina ran a hard currency control known as the cepo – literally, the stocks. Ordinary people could not legally buy dollars at the official rate, so a parallel market grew up alongside it, and at its worst the informal “blue” dollar cost more than twice the official one.

The cepo was lifted for individuals on 11 April 2025, taking effect the following Monday. Since then the peso has floated inside a band set by the central bank, and since January 2026 the edges of that band move a little every day in line with the last published inflation figure. The peso has been trading comfortably inside the band, nowhere near either edge.

At the close of 31 July 2026 a dollar cost roughly 1,510 pesos at a bank and about 1,560 on the informal market. That is a gap of around 3%. Two years ago it was over 60%, and in late 2023 it was close to 200%. For a visitor or a new resident this is the single biggest practical change: you can now use the official rate and stop hunting for a better one.

Companies have noticed too. Firms sent USD 2.6 billion of profits out of Argentina in the first half of 2026, the most in more than a decade. Foreign oil and gas companies started sending profits home again in early 2026 – USD 460 million in March alone – for the first time in almost seven years. Restrictions do remain on the company side: profits earned in financial years before 2025 are still blocked, firms still cannot buy dollars simply to hold them, and inter-company debts taken on before December 2023 have their own rules.

What it cost, and who paid

The disinflation was not free, and it is worth being plain about who paid for it.

Real wages collapsed in the first months of 2024, recovered through 2024 and 2025, and have since gone flat. Workers with formal, on-the-books jobs in the private sector were still 2.9% worse off in May 2026 than a year earlier, once rising prices are taken into account. Pay is rising in pesos – on-the-books private-sector wages were up 29.3% on the year – but inflation over the same period was 33.2%, so the gap is still going the wrong way.

Public spending was cut across pensions, public works, provincial transfers, energy subsidies and university budgets. Bus fares and electricity bills, held artificially low for years by government subsidy, were allowed to rise towards what the services actually cost.

Those increases fed straight into the published inflation figures, even as the money-printing behind the old inflation stopped.

The unions have not gone quiet. The CGT, Argentina’s main labour federation, called its fourth general strike on 19 February 2026, shutting down trains, the subway and long-distance transport as Congress debated the labour bill.

The budget: a surplus, but a thin one

Milei’s central promise was a balanced budget, and he has broadly delivered one – which for Argentina is genuinely unusual.

In the first half of 2026 the government took in more than it spent: a surplus worth 0.6% of the economy before debt interest, and still 0.1% after paying it. June itself was in deficit, because of a bonus payment to pensioners and a tax collection that shifted into another month.

The full-year target agreed with the IMF is 1.4% of the economy before interest, cut from the 2.2% originally set. Meeting it requires the second half to be tighter than the first, in an economy that is growing but where the political pressure to spend never really goes away.

The IMF programme and the money in the vault

Argentina and the IMF signed a USD 20 billion, four-year programme on 11 April 2025 – the same week the currency controls came off, which was not a coincidence. The Fund’s board completed the second review on 21 May 2026, releasing about a billion dollars and taking total disbursements to about USD 15.8 billion.

Reserves have rebuilt. The central bank bought USD 2,162 million in the market in July 2026 alone and about USD 13.3 billion so far this year, Gross reserves ended July at about USD 47.6 billion, after a USD 1.6 billion drop on the final day of the month.

The market’s verdict shows up in country risk – the extra interest Argentina pays over US government debt. It closed July 2026 at about 4.3 percentage points above what the United States pays, near its lowest level since 2018. At the start of Milei’s term it was above 20 points.

Politics: Milei is no longer a president without a Congress

For his first two years Milei governed with a tiny parliamentary bloc and ruled largely by decree, which the courts repeatedly trimmed. That changed on 26 October 2025.

His party, La Libertad Avanza, took 40.8% of the vote in the mid-term elections, the largest single share. It went from 37 deputies to 92 at the December swearing-in, and from 6 to 20 senators. It has since grown to about 95 deputies through defections, enough to edge past Peronism as the largest single bloc in the lower house; in the Senate it is now level with Peronism rather than ahead of it. With those numbers Milei can sustain a veto, as long as his bloc and its allies hold together, which in practice means the opposition can no longer overturn his decisions.

He has used it. Congress passed a sweeping labour reform in February 2026, changing severance rules, working hours, holidays, strike rules and union dues, and scrapping eight national taxes. And on 30 July 2026 Milei sent Congress a bill rewriting the central bank’s founding charter: its mandate would be narrowed to price stability alone, and it would be barred from lending to the Treasury, the provinces or municipalities. Bonds rallied on the announcement.

The next national election is in 2027.

What this means if you are moving there, working there or investing

Buying and selling currency is normal again. You can open an account, buy dollars and move money in ways that were simply not possible before April 2025. Check the current rules before a large transfer, but stop planning around the cepo.

Argentina is no longer a bargain. The peso has strengthened in real terms and Buenos Aires is not the cheap city it was two years ago. Anyone arriving on the strength of an old blog post about a dollar going twice as far will get a shock. Prices outside the capital are still noticeably lower.

Prices still move fast. Even at 1.9% a month, prices rise about 25% over a year, so a sum fixed in pesos buys about a fifth less by the end of it. Index anything long-term, or price it in dollars.

The government is no longer at risk of being blocked at every turn. Whether you like the direction or not, the government has the votes to keep going until 2027. The risk is no longer that the programme collapses next quarter; it is whether wages catch up before patience runs out.

Frequently Asked Questions

What is Argentina’s inflation rate now?

Prices rose 1.9% in June 2026, the lowest monthly reading in ten months, and 33.5% over the previous twelve months. INDEC publishes the July figure on 13 August.

Can foreigners buy dollars in Argentina?

Yes. Argentina lifted its currency controls for individuals in April 2025.

A dollar cost about 1,510 pesos at a bank and 1,560 on the informal market at the end of July 2026, a gap of roughly 3%.

Is poverty still rising in Argentina?

No. Poverty peaked above 50% in the first half of 2024 and has fallen since.

INDEC put it at 28.2% for the second half of 2025, the lowest reading since early 2018.

Sources: INDEC – consumer price index, June 2026, Rio Times – Cost of living in Buenos Aires 2026, Banco Central de la República Argentina, IMF – second review of the Extended Fund Facility, May 2026