About two months ago, I wrote that there was a growing sentiment among certain elite circles that the Javier Milei administration would face a significant crisis in the near future. These small but influential groups—spanning businessmen, politicians, journalists, economists, and other key opinion leaders—believed the Casa Rosada will eventually confront an explosive situation of its own making that could derail the government. It appears that they were on to something.
The failure of the libertarian political project wouldn’t necessarily manifest as a government collapse, though that remains a possibility according to this segment of Argentina’s “círculo rojo” decision-makers. Instead, they anticipated it would be tied to a loss of popular support for the president and his policies, triggering a typical exodus of circumstantial allies withdrawing their votes and support. If this thesis proved correct, Milei would ultimately find himself politically isolated, surrounded only by his sister and presidential chief-of-staff Karina, his dogs, and perhaps a few diehard supporters. Once again, the current mix of corruption scandals and financial tensions definitely fit into this scenario.
It’s difficult to determine how much of this vision represents wishful thinking versus genuine analysis, particularly since these groups have either opposed the Milei project from the start or been adversely affected by it. Political animosity often breeds hopes for revenge.
Economic Model Under Strain
The arguments behind this theory encompass both political and economic factors. On the economic front, the policy model pursued by Milei and Economy Minister Luis “Toto” Caputo appears to have addressed macroeconomic problems but suffers from multiple contradictions that could seriously backfire.
The combination of a strong peso and weak US dollar creates an artificial sensation of wealth by inflating incomes in dollar terms while helping contain peso inflation through pass-through effects. This arrangement greatly benefits upper classes who travel abroad frequently and those purchasing cars or houses—both dollarized assets in Argentina. However, it severely disadvantages exporters and domestic consumers, as costs have skyrocketed, eating into the current account surplus and pressuring the Central Bank’s chronically low hard currency reserves.
A large and growing portion of society remains excluded from the economic rebound, specifically those with formal and informal wages who aren’t at the extremes. While the very wealthy are protected by their savings and the very poor have seen social welfare outpace inflation, the middle segments have experienced serious erosion in their purchasing power. Small and medium-sized companies have closed across the nation, and it’s difficult to envision how this economic model will create quality jobs, given its anti-industrial bent and focus on extractive industries.
According to Agustín Salvia, head of the Social Debt Observatory at UCA Catholic University, while statistical poverty measurements have increased, self-perceived “economic stress”—referring to feelings of insufficient income to cover necessities—has also risen significantly.
Political Fragmentation and Electoral Dynamics
The deterioration of family finances across broad swaths of society could eventually erode Milei’s solid polling figures. Every local election held this year has shown record low turnouts, indicating people are disengaging from politics. Milei’s 2023 electoral victory saw him defeat the two major coalitions that had dominated Argentine politics for two decades, capitalizing on pent-up anger against what he termed “the caste.”
The biggest damage was inflicted on former president Mauricio Macri’s Juntos por el Cambio coalition, which had been expected to win. It fragmented into multiple pieces, with Milei attempting to absorb the largest segments, particularly centrist and far-right elements associated with PRO. The libertarian coalition La Libertad Avanza took the top spot in Buenos Aires City legislative elections, where Jorge Macri currently serves as mayor. They’ve also absorbed former PRO presidential candidate Patricia Bullrich and her ex-running mate Luis Petri of the Unión Cívica Radical. They’ve teamed up for the local elections in Buenos Aires Province and national midterms, but in reality the libertarians are in control.
Despite a modest congressional presence, Milei has managed to pass or block legislation by counting on support from diverse groups, mainly PRO. He has also politically humiliated Macri, who initially lent support but now faces absorption by LLA. Centrist Peronists, Radicals, and deputies responding to provincial governors have also provided support—all while being publicly berated and attacked by the president and his allies.
Opposition Struggles and Future Scenarios
Across the aisle, the pan-Peronist Unión por la Patria coalition remains legislatively united but is deeply fragmented politically. With Cristina Fernández de Kirchner under house arrest yet still disputing power with Governor Axel Kicillof, Buenos Aires metropolitan Peronists struggle to develop a proper strategy against the LLA-PRO coalition in October’s national elections.
Provincial interests add another layer of division, with some Peronist governors supporting Milei’s measures. The government has grouped this diverse political structure under the “Kirchnerite” label, choosing to antagonize Fernández de Kirchner directly while attempting to win the “us versus them” vote. They consistently blame Kirchnerites for Argentina’s decline, associating them with corruption, inefficiency, and public suffering.
Political speculation centers on whether an anti-Milei front could effectively channel the distrust, anger, and disillusionment caused by the government’s constant aggression toward opponents. This could emerge across the political spectrum: Kicillof or a “moderate” Peronist coalescing non-Kirchnerites, Macri or a representative attempting to capture the center-right vote, or a reconstituted Juntos por el Cambio coalition including UCR radicals and conservative Peronists. Even a novel right-left coalition similar to Brazil’s broad front against Jair Bolsonaro remains possible. As of now, this hasn’t occurred, with the anti-Milei centrists representing a minority position ahead of the election.
At the social level, the growing number of people excluded by Milei’s model could galvanize grassroots movements seeking representation through another outsider—someone representing the opposite of Milei, similar to Gabriel Boric’s student revolution in Chile. This scenario, reportedly expected by Fernández de Kirchner, could include social unrest, though likely not escalating to the 2001 crisis levels.
A centrist figure from established political lineage, associated with a broad coalition, could also mobilize voters responding to the president’s apparent disdain for democratic norms and civic responsibility. Macri’s circle continues pushing for an open break with Milei to lead right-wing opposition. While the former president claims disinterest in running again, a younger, emerging figure not yet tracked by polls could emerge.
The Path Forward
These scenarios are being analyzed by numerous socio-political actors attempting to anticipate what follows Milei. They assume the economic model will lose steam and that the political model will be undermined from within by libertarians themselves.
However, Milei could surprise critics by pragmatically adjusting his economic model to dissipate internal tensions while maintaining political centrality sufficient to win upcoming midterm elections and re-election in 2027. Whether Argentina’s elite predictions prove accurate or whether the president can navigate these mounting challenges will likely determine the country’s political trajectory for years to come.
The coming months will test whether Milei’s polarizing approach can sustain popular support amid economic pressures and political isolation, or whether the predicted implosion will materialize as his critics anticipate.
This piece was originally published in the Buenos Aires Times, Argentina’s only English-language newspaper.