Economists criticize Argentina's economic sustainability

Economists have raised concerns regarding the sustainability of the Argentine government's economic model under President Javier Milei. Luis Palma Cané described the economy as being in an “unstable equilibrium,” noting a deep divide between different economic sectors. He highlighted critical issues such as low liquidity, a lack of credit, and significant employment struggles, stating that inflation has been surpassed by concerns over jobs and income. Palma Cané also noted that since the start of the current administration, over 30,000 companies have closed, resulting in a loss of 250,000 jobs.

Similarly, economist Carlos Melconian criticized the current strategy, suggesting that the country is “smoking Vaca Muerta.” He argued that the foreign currency generated by the agricultural, mining, and Vaca Muerta energy sectors is being used to sustain dollarization and the exchange rate scheme rather than rebuilding reserves, economic activity, or purchasing power. Melconian characterized the population into three groups: 20 percent doing well, 30 percent neutral, and 50 percent “sinking.” He emphasized that the central challenge is no longer just maintaining a fiscal surplus, but finding a way to address this extreme economic heterogeneity.