Do populist leaders always leave countries worse off?

Cambio, cambio. ” Dozens of money changers are hawking US dollars along Florida Street, a pedestrian strip in Buenos Aires.

- By Heather Stewart

Known as arbolitos (“little trees”), they had been thriving in the buildup to last weekend’s midterm elections in a country long used to saving in the greenback.

Like her, economists across the spectrum had expected a devaluation of the Argentine peso to come after last weekend’s vote. The unexpected strength of the victory by president Javier Milei’s party, La Libertad Avanza, makes a devaluation less likely. But economists still say the currency is too strong to allow Argentina’s economy to grow sustainably.

Markets on Monday reacted sharply to the surprise victory, with shares rising more than 40% in pre-market trading and the Merval index posting its biggest one-day jump in 30 years, up almost 32%. Dollar-denominated sovereign bonds climbed as much as 23%. The result was being seen as a renewed wave of optimism that Milei’s austerity plan and a multi-billion dollar bailout from the US, announced last week, could succeed.

Milei has placed a cap on the currency to tame triple-digit inflation and now it remains overvalued and reserves are depleted, leaving Argentina’s economy stagnant as consumers turn to cheap imports.

Luciano Galfione, a textile industrialist, said the family company he heads is living through “the worst moment in its history”. Since Milei took office, Galfione has laid off almost 50 workers and suspended 45 more at his Buenos Aires mill as consumption has slumped.

Between December 2023 and July 2025, 18,000 businesses have closed and 253,800 jobs have been lost, according to the Centre for Argentine Political Economy (CEPA). Alongside the exchange rate freeze, which made Argentina the most expensive country in South America, Milei’s government has reduced or scrapped tariffs, leaving heavily taxed local industries at a disadvantage against Chinese imports.