Do populists always crash the economy?

"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 (little trees), they are thriving ahead of the 26 October midterm elections in a country long used to saving in the greenback. The best time to buy is now, says one arbolito, declining to give her name. [The dollar] went down a little but it is a fake-out it'll rise again."

"The president, Javier 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, says the 75-year-old family company he heads 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 consumption has slumped."

"Between December 2023 and July 2025, 18,000 businesses have closed and 253,800 registered 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 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, says Galfione, seeing no easy exit for Milei from his predicament."

Dozens of street money changers sell US dollars in Buenos Aires ahead of the 26 October midterm elections, reflecting widespread dollar-saving and expectations of a post-election peso devaluation. President Javier Milei capped the currency to curb triple-digit inflation, but the peso remains overvalued, reserves are depleted, and the economy has stalled as consumers shift toward cheap imports. Tariff reductions have exposed heavily taxed local industries to cheaper Chinese competition, prompting layoffs and suspensions. Between December 2023 and July 2025, 18,000 businesses closed and 253,800 registered jobs were lost, while pension cuts fuel social protests.

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