What's happened
On November 3, 2025, Argentina's President Javier Milei's party, La Libertad Avanza (LLA), secured a decisive victory in midterm congressional elections, buoyed by a $40bn US bailout led by Donald Trump. Despite deep austerity measures, inflation reduction, and rising poverty, Milei's coalition strengthened its congressional presence, enabling him to advance free-market reforms amid ongoing economic and social challenges.
What's behind the headline?
Milei's Victory: A Double-Edged Sword
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Economic Stabilization vs. Social Strain: Milei's austerity measures have successfully reduced inflation from over 200% to around 30%, a significant achievement in Argentina's recent history. However, this has come at the cost of widespread job losses (over 200,000 formal jobs), business closures (around 18,000), and soaring poverty rates, which peaked above 50% before easing slightly.
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US Influence and Political Leverage: The $40bn bailout from the Trump administration was pivotal in stabilizing the peso and consumer prices ahead of the election, effectively acting as economic blackmail. Trump's public support and conditional aid played a critical role in Milei's electoral success, raising questions about Argentina's economic sovereignty.
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Congressional Power and Policy Outlook: With LLA forming the largest bloc in Congress, especially combined with the centre-right PRO party, Milei now has the legislative backing to push through his free-market reforms, including labor market liberalization and tax simplification. Yet, the party still lacks an outright majority, necessitating alliances.
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Social Impact and Vulnerable Groups: The austerity has disproportionately affected pensioners, people with disabilities, and the homeless, with many losing pensions and benefits. Homelessness in Buenos Aires has surged by 38% since late 2023, reflecting the human cost of economic tightening.
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Future Risks: Analysts warn that without capital controls and fiscal coordination, Argentina risks repeating past cycles of devaluation and crisis. The artificially strong peso, maintained by burning reserves and IMF loans, may not be sustainable, threatening economic stability.
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Political Dynamics: Milei's cabinet reshuffle, replacing traditional elites with ideological loyalists, signals a shift towards a more combative governance style. His exclusion of Peronist governors from dialogue underscores ongoing political polarization.
Overall, Milei's victory consolidates his mandate but deepens Argentina's economic and social challenges. The coming months will test whether his reforms can deliver sustainable growth without exacerbating inequality and instability.
What the papers say
The Guardian's detailed reporting highlights the stark social consequences of Milei's austerity, noting a 38% rise in homelessness and pension cuts affecting 140,000 people with disabilities. Evelyn Bierbrauer from Manos Abiertas describes the desperation leading people to seek refuge in rubbish containers. Meanwhile, AP News and Bloomberg focus on the political shifts post-election, including cabinet changes and the role of US financial support. Bloomberg's Patrick Gillespie notes Wall Street banks stepping back after the election, signaling a shift in financial responsibility to Argentine investors. The Guardian and Al Jazeera provide critical perspectives on the US bailout's political implications, with Al Jazeera recalling historical US interventions and highlighting the harshness of Milei's policies. The New Arab and The Independent emphasize the electoral dynamics, voter disillusionment, and Milei's strengthened congressional position. Contrasting views emerge on the sustainability of Milei's economic model, with economists like Matías Vernengo warning of potential crises without capital controls, as reported by The Guardian. This range of sources offers a comprehensive view of Argentina's complex political economy under Milei's leadership.
How we got here
Javier Milei took office in December 2023, implementing a 'chainsaw' austerity plan to reduce inflation and achieve fiscal surplus. His policies led to job losses, business closures, and increased poverty. The US pledged a $40bn bailout contingent on Milei's electoral success, influencing the midterm elections where LLA expanded its congressional influence.
Go deeper
- How is the $40bn US bailout affecting Argentina's economy?
- What are the social impacts of Milei's austerity measures?
- What challenges does Milei face in Congress after the midterms?
Common question
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How Did US Politics Influence Argentina's Recent Elections?
The recent Argentine elections have been heavily influenced by US financial support and political backing, raising questions about foreign interference and its impact on local democracy. With Donald Trump claiming credit for Milei's victory and a $40bn bailout tied to the election outcome, many wonder how US interests shape Latin America's political landscape. Below, we explore the key questions surrounding this complex issue.
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How Does US Influence Shape Argentina's Election and Latin America?
Recent developments in Argentina's election reveal significant US involvement, raising questions about foreign influence in domestic politics. With a $40bn US bailout linked to the election outcome and claims of influence by figures like Donald Trump, many wonder what this means for Argentina and the broader Latin American region. Below, we explore key questions about US foreign influence, its risks, and what this signals for future international relations.
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What Does Javier Milei's Election Win Mean for Argentina's Future?
Javier Milei's recent victory in Argentina's elections has sparked widespread discussion about the country's economic and political future. With US support playing a significant role, many are asking what this means for Argentina's stability, economy, and sovereignty. Below, we explore the key questions surrounding Milei's win and its implications.
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How Does US Support Influence Elections in Latin America?
Recent events in Latin America, especially Argentina, have raised questions about US involvement in regional politics. With US bailouts and political backing playing a role in election outcomes, many wonder how deep this influence runs and what it means for regional stability. Below, we explore key questions about US support and its impact on Latin American countries.
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What Does Argentina's Election Victory Mean for Its Economy?
Argentina's recent election victory by Javier Milei's party has significant implications for the country's economy and regional stability. With a US bailout backing Milei's government, many are asking how these political shifts will impact inflation, poverty, and economic reforms. Below, we explore the key questions surrounding Argentina's political and economic future.
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What Are the Key Outcomes of Argentina's Midterm Elections?
Argentina's recent midterm elections have significant implications both domestically and internationally. With President Javier Milei's party, La Libertad Avanza, securing a strong congressional presence amid economic turmoil and US financial support, many are wondering what this means for Argentina's future and global influence. Below, we explore the main outcomes of these elections and their broader impact.
More on these topics
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Javier Gerardo Milei is an Argentine libertarian economist, politician, author, radio conductor, preacher, public speaker and recently-elected federal deputy, sympathetic to the Austrian School of economic thought.
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Argentina, officially the Argentine Republic, is a country located mostly in the southern half of South America. Sharing the bulk of the Southern Cone with Chile to the west, the country is also bordered by Bolivia and Paraguay to the north, Brazil to the
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Donald John Trump is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021.
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The United States of America, commonly known as the United States or America, is a country mostly located in central North America, between Canada and Mexico.
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Buenos Aires is the capital and largest city of Argentina. The city is located on the western shore of the estuary of the Río de la Plata, on the South American continent's southeastern coast.