Javier Milei's third year in power is heading toward its conclusion with a paradox that unsettles markets and rattles the nerves of the Cabinet and the libertarian ranks. The President arrives at this point in a stronger position than Alberto Fernández in 2022 and Mauricio Macri in 2018. His credentials are macroeconomic stability and the decline in inflation.
Yet there is something in his psychology of power that prevents him from stepping out of a perpetual honeymoon with his own reading of reality and the narrative that flows from it. This is clearly a disadvantage compared to his predecessors in office. The engineer resorted to an economic tourniquet after gradualism ran its course. Alberto consciously weathered a shipwreck and handed the political and economic helm to Sergio Massa, who also became the presidential candidate. Both reacted on the fly, though they understood that reelection was dead.
Milei, by contrast, surprises with his spirit of infallibility. He assumes that any alleged imbalance is merely a perversion wrought by everyone else—the opposition that wants him weakened, the Congress that throws up obstacles, and the journalists whose malice, by his latest estimates, encompasses 96% of them.
His diagnosis is stoically shared by Karina, by Federico Sturzenegger, the Minister of Deregulation, and, with some nuance, by the Caputos. Luis, the Economy Minister, does not hide his unease over the delay in everyday economic life sending positive signals. Santiago, the younger one, is alarmed because his social media communication tricks have lost the positive impact they once had.
There is a general acknowledgment. According to the consultancy Ad Hoc, August measurements showed that social sentiment toward Milei registered nearly 56% in negative territory. Three episodes are worth revisiting. The impact of the presidential Malvinas pivot dissipated in almost a week.
The inconsistencies involved in having claimed otherwise worked against him.
The libertarian leader assured that the issue had been in the works with Donald Trump for three years. The Republican leader arrived at the White House in 2025. Something does not add up. At the same time, Milei declared that the conflict was triggered after Trump made public his irritation with the United Kingdom for withholding support in the war against Iran. His first mention of it came in April. The second came at the beginning of this month.
The video launched by the Casa Rosada showing crowds on Corrientes Street on Saturday the 12th at night also failed to generate the expected favorable ripple effect. It was an attempt to counter those who highlight the fall in consumption and the financial hardships facing citizens. Criticism and memes poured in. The final blow came with the wholesale inflation index of 2.1% for August reported by Indec. Milei had boasted that if July's 0.8% figure were repeated, he would hold another rock concert with his band to celebrate. For now, that has been cancelled.
Milei, in the view of libertarians who do not inhabit the Casa Rosada on a daily basis but move through Congress and the streets, are beginning to fear that the Government's leadership has fallen into the trap of "everything is going well."
Former Speaker of the Chamber of Deputies Emilio Monzó, who is now consumed by the idea that in 2027 Argentina will break free from its electoral pendulum, tends to offer an interpretation of the phenomenon being observed.
In his view, the official misreading stems from that great triumph in the 2025 legislative elections. The President and his inner circle interpreted it as a kind of definitive consecration by society. The former congressman and former PRO official argues that victory was merely "preventive" — a massive vote in favor of blocking any attempt at a return to the past. To Kirchnerism, which a month earlier had delivered a beating to La Libertad Avanza in the provincial elections in Buenos Aires. Even in a context that has shifted since that moment, the Government would still be operating with the same handicap.
There is a study by the consulting firm ARESCO that illustrates that transformation. 46% of citizens believe the greatest problem today lies in the lack of work and economic activity. Adding concern about inflation (17%), which ranks third below crime and insecurity, the economic agenda would occupy 63% of society.
Looking at the same report, one can see that the unfavorable rating of the Milei government has now climbed to 58%. The favorable rating remains at elevated levels: 41%. Although within that figure there is an interesting breakdown. The 27%, known as the invulnerable core, states it will stand by the libertarian administration until the very end regardless of results. In contrast, 14% make their support conditional on whether things improve — referring to the economy. A percentage that could prove decisive for the fate of presidential reelection.
The obstacle now is that Milei remains lashed to the mast of his non-negotiable dogma. The course is not up for debate. That is what the congressional representatives who met with him heard. It was also the spirit that prevailed at the political leadership meeting. Sturzenegger stands as his principal shield. The Minister of Deregulation refuses to believe the Government may be suffering a slow drain of support among the most vulnerable social sectors. A true mystery of perception from the "Colossus," as Milei has dubbed him.
But beneath the President's mast, evidence surfaces that is difficult to camouflage with dogma or digital pageantry.
INDEC reported that the Argentine economy contracted 0.6% in the second quarter, affected above all by a decline in consumption and investment. These have now fallen for five consecutive quarters and remain at a level similar to the aftermath of the pandemic. Private consumption declined 2.4%.
Unemployment climbed to 7.9%, barely above the first quarter. A breakdown explains the average and the asymmetric way in which activity is unfolding. Greater Rosario registers 11.5%, Greater Córdoba 10.5%, the Buenos Aires metropolitan suburbs 8.2%. This contrasts with 4.3% in the NOA region, 5.9% in Cuyo, and 6.3% in Patagonia.
According to studies by the consulting firm ABECEB, productive investment currently stands at between 14% and 17% of GDP. The minimum investment rate needed for a solid recovery should be around 25% of GDP. In the first half of the year alone, 8,734 businesses closed in Argentina. Still to come is the poverty report that INDEC will release next week — which is expected to be yet another bitter pill for the ruling party.
The Government, facing this landscape, confronts three difficulties. The first is that for Milei, reality has a different complexion. The second lies in the fact that the Budget estimates are far from being able to stimulate expectations. The third is that misalignments in governance keep recurring and internal conflicts are multiplying within the libertarian world.
Budget premises tend to be utopian in Argentina. Not only under Milei. It projects an annual inflation rate of 18% for 2027. It had set 10% for 2026, and by this point has already exceeded 20% by a wide margin. It promises 4% GDP growth. It had set 3% for the current year, which is also unlikely to be met.
Once again, the most notable aspect centers on spending cuts. With reductions to universities, a freeze on the Universal Child Allowance (AUH), and cuts to the Disability Emergency Law. Proposals that are beginning to trigger the first conflicts — both public and behind closed doors.
Patricia Bullrich sent an unfriendly message to "Toto" Caputo, holding him responsible for those additions to the Budget without having received prior notice. She, as head of the libertarian bloc, will have to manage it in the Senate once the Chamber of Deputies addresses it. "Relationships suffer when things are handled this way," she fired back. She aimed her criticism at the political inner circle, the heart of Mileism. The siblings of power never confront her directly.
Bullrich has not stopped drawing distinctions with the Casa Rosada since the Manuel Adorni scandal erupted. She has repeated three times that the economy of everyday life needs improvement that is not materializing. The Mileis are worried because in the hands of the former PRO activist lies the key to the only electoral reform the Government cares about: the elimination of the PASO primaries. The senator insists that, given the current libertarian conduct, it will be difficult for her to secure the votes needed to achieve that goal. Is Bullrich contemplating her own candidacy in a primary race if Milei continues to wear down?
The cuts evident in the Budget in sensitive areas stand in contrast to spending earmarked for the military sector. Justified by the Malvinas cause the President has embarked upon. Billions to reinforce the Malvinas Secretariat, advance the construction of the Integrated Naval Base in Tierra del Fuego, and acquire naval helicopters, submarines, and frigates. For the latter two, US$3.5 billion.
This purported military strengthening dovetails with the Sovereignty Defense Law, which appears riddled with red flags and contradictions. In the first case, imprisonment for those who "manipulate public opinion through coordinated mass disinformation campaigns" — a message directed at journalism. In the second case, sanctions against companies operating in the Malvinas zone. British firm Harbour Energy was barred for 15 years in 2013. The new law could render that sanction void. The company currently participates in gas exploration at Vaca Muerta.
All these moves coincide with a change in the appearance of the Olivos presidential residence. On Milei's orders, civilian employees were purged and replaced by military personnel. Security and espionage concerns were cited as the reasons. Very strange things are happening.
