Do populist leaders always leave countries worse off?

Politicians from all over the globe watch and wait as Argentina's president takes his economy to the brink

- Heather Stewart

“Cambio, cambio.” Under the blazing sun, dozens of money changers are hawking US dollars along Florida Street, a bustling pedestrian strip in Buenos Aires. Known as arbolitos or “little trees”, they are thriving in the run-up to tomorrow’s midterm elections in a country long used to saving in the greenback.

“The best time to buy is now,” said one arbolito, who declined to give her name. “[The dollar] went down a little but it is a fake-out - it'll rise again.”

Like her, economists across the spectrum expect a devaluation of the Argentine peso once voting is over. The president, Javier Milei, has placed a cap on the currency to tame triple-digit inflation and it remains overvalued and reserves are depleted, leaving Argentina’s economy stagnant as consumers turn to cheap imports.

Luciano Galfione, a textile industrialist, said his 75-year-old family company is living through “the worst moment in its history”. Since the chainsaw-wielding Milei took office, Galfione has laid off almost 50 workers and suspended 45 more at his Buenos Aires mill as sales have slumped.

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

“It’s the perfect storm,” said Galfione, seeing no easy exit for Milei’s predicament. “If he devalues the currency, inflation will soar. For now, his only achievement is containing it - at the cost of a major recession.”

Along with the retirees who protest at deep cuts to their pensions outside Congress every Wednesday, he is among those counting the cost of Argentina’s turn to Milei two years ago.