Policy Backgrounders

Argentina’s New President and Possible Dollarization

December 08, 2023

Argentina’s new President, Javier Milei, has described himself as an “anarcho-capitalist.” As he takes office on December 10, many questions remain about his new government and how much he will be able to realize his ambitious (and often strident) campaign promises.

• Milei’s political movement, Liberty Advances, won 20 of 23 provinces in Argentina despite being only two years old, and he defeated the moderate Peronist candidate Sergio Massa, the current Economy Minister, by 56% to 44%.
• But Milei’s party only won 38 seats of 257 in the Chamber of Deputies and seven of 72 in the Senate, which will force him to make coalitions, particularly with the center-right led by Patricia Bullrich and possibly with moderate Peronism to have a realistic chance of enacting his proposals in Congress.
• Argentina’s economic situation is very serious, with 142% inflation in October, 40% of the population living in poverty, and a fiscal debt estimated to be 89% of GDP, making it difficult for the country to borrow on international markets as the country has defaulted three times in 20 years. While all this pushes Milei’s desire (and campaign promise) for dollarization, it may also make dollarization more difficult.