Argentina has compulsory voting. Javier Milei, a libertarian, won the presidential race in late 2023, running as an angry outsider who attacked la casta (the political elite) as corrupt. His principal opponents are the leftist Peronists and the centre-right PRO, the party of former president Mauricio Macri. Buenos Aires province covers nearly 40% of the electorate. The next general election is in 2027.
The Peronist movement, which dominated Argentine politics for 80 years, is in disarray. In June 2025 the Supreme Court upheld a six-year corruption sentence against Cristina Fernández de Kirchner, the movement's leader and a former president; she is under house arrest and barred from public office. Other leading Peronists—her son Máximo Kirchner, the governor of Buenos Aires province Axel Kicillof, and former economy minister Sergio Massa—all come from Buenos Aires and struggle to win support in the rural interior. Mr Kicillof has presidential aspirations; his economic views are unorthodox.
PRO, unable to beat Milei, has allied with his Liberty Advances party. Argentine attitudes have shifted profoundly: in 2011, 70% wanted most things done by the state rather than the private sector, according to Isonomía, a pollster; by 2024 that had fallen to 42%.
Argentina claims sovereignty over the Falkland Islands, which Britain controls. The two countries fought a war over the islands in 1982. As a legacy of the conflict, Britain maintains tight restrictions on weapons sales to Argentina, even by third countries, blocking sales of military equipment with British components.
Argentina's armed forces are in bad shape. Milei is raising the defence budget from 0.5% of GDP to 2% over seven years and has applied for NATO-partner status. He wants to modernise with NATO-compatible equipment but is constrained by Britain's embargo. Argentina bought older F-16s from Denmark with American money because they lacked British parts.
After a long hiatus, defence dialogue between Argentina and Britain has restarted. Milei has adopted a conciliatory tone on the Falklands: he openly admires Margaret Thatcher, admits the islands "are in the hands of the UK", says Argentina will not try to retake them by force, and has appeared to imply that the islanders have a right to self-determination.
America is keen for the arrangement to work, alarmed by Chinese infrastructure projects and illegal fishing in Argentina's deep south. Under the previous administration, a Chinese firm nearly built a large port near the Argentine entrance to the Strait of Magellan, and the government came close to buying Chinese fighter aircraft. In 2021 Argentina signed a deal allowing its officers to train in Russia.
Argentina struck one of the most favourable reciprocal trade deals with Donald Trump, receiving a capped tariff rate of 10% with big carve-outs, including being able to sell large quantities of untariffed beef to Americans. In return, Argentina widened access to its market but avoided many obligations imposed on other partners.
At the start of the 20th century Argentina was one of the world's richest countries. Decades of inflation and fiscal mismanagement turned it into a crisis-prone middle-income economy—a cautionary tale for any rich country that lives beyond its means.
Milei has slashed government spending and brought raging inflation sharply down. Annual inflation fell from 211% in 2023 to around 30% by late 2025. The poverty rate dropped by 21 percentage points in a year. In April 2025 the government partially floated the peso within a band, prompted in part by the IMF. From January 2026 the central bank announced the band's limits would widen in line with inflation (rather than by a fixed 1% per month), allowing the peso—which many believe is overvalued—to weaken more rapidly. The shift was accompanied by a plan to buy some $10bn in foreign reserves in 2026. Capital Economics, a London consultancy, said the peso would still be overvalued even under the new regime.
The strong peso hampered foreign-reserve accumulation and induced imports, creating a current-account deficit. By mid-2025 the government had badly missed its IMF reserve targets. In July the peso fell by over 12%. Scott Bessent, America's treasury secretary, intervened with a $20bn swap line and direct peso purchases—highly unusual backing for another country's currency. Despite the support, the central bank spent roughly $3bn of scarce reserves defending the currency ahead of mid-terms, and overnight interest rates soared past 100%. Argentina still places capital controls on its banks and businesses. Debt repayments will require at least $18bn in 2026; the IMF plans to lend just $1.5bn.
After shrinking in 2024, GDP grew by 4.4% in 2025; the forecast for 2026 is 4%. Recovery is uneven: industry output remains lower than when Milei took office, while agriculture and oil have surged—but are less labour-intensive. Unemployment stands at 6.6%. In the first two months of 2026 the central bank purchased $2.7bn in foreign reserves. Monthly inflation hit a low of 1.5% in May 2025 but crept back to 2.9% in January 2026—about 32% annualised. Argentina targets total money supply rather than interest rates, unlike most rich countries, contributing to high and volatile local rates. Polling shows unemployment now consistently beats inflation as voters' biggest concern.
On October 26th 2025 Milei's party, Liberty Advances (LLA), won the national mid-term elections with almost 41% of the vote, nine percentage points ahead of the Peronists—far surpassing expectations. Turnout of 68% was the lowest since 1983. LLA even won Buenos Aires province, enjoying a 15-point swing from its defeat there in September. Milei's spending cuts are perhaps the deepest and fastest ever imposed through broad democratic consent; the only comparison is post-crisis Greece. Since 2009 the party that wins the mid-terms has lost the subsequent presidential election.
Under Milei, Argentina has pursued a radical deregulation agenda led by Federico Sturzenegger, minister of deregulation and state transformation. The government has experimented with allowing regulated and unregulated segments to coexist in the same market—particularly in financial instruments—letting consumers choose which segment to operate in. The result was rapid growth of the unregulated market and fee compression in the regulated one. Argentina has also experimented with private concessions in national parks, where operators build public infrastructure at their own expense. Beeflow, an Argentine firm, has developed targeted pollination technology that conditions bees to visit only the blossoms of a particular crop. The government intends to keep artificial intelligence deregulated.
Argentina's oil sector is roaring to life under Milei, fuelled by Vaca Muerta ("dead cow" in Spanish), a shale region in the west of the country. Oil production there leapt by 26%, year on year, in the first quarter of 2025. A big pipeline project, due to start in 2027, will eventually transport some 700,000 barrels per day of oil to the Atlantic coast for export.
In early 2026 Milei's government passed a major labour reform in extraordinary sessions of Congress—the biggest prize in a legislative bonanza that also included a budget, a reform to lower the age of criminal responsibility and a trade deal with Europe. Argentina's labour laws date to the 1970s and are so restrictive that more than 40% of workers are in the informal sector. The reform makes it cheaper to fire people and creates clarity about severance costs, dampening a boom in lawsuits: according to IERAL, a local think-tank, the country has roughly the same rate of workplace injuries as Spain but they result in more than 12 times as many lawsuits. The reform also empowers salary negotiations at the regional or company level, rather than relying on national wage agreements.
Living in the complex world of the future is somewhat like having bees live in your head. But, there they are.