ArgentinaS Shock Therapy vs. Colombia‘s gradual Shift: Assessing Economic Outcomes Under Milei and Petro
BUENOS AIRES/BOGOTÁ – A stark contrast in economic approaches is playing out in Argentina and Colombia,with early results offering a complex picture of success and trade-offs under the leadership of President Javier Milei,a libertarian,and President Gustavo Petro,a progressive. While both nations face unique challenges, a recent analysis reveals diverging paths and outcomes tied to their respective economic philosophies.
Argentina, grappling with years of economic imbalance, saw a intentional devaluation of its currency – the peso – in December 2023, a move agreed upon with the International Monetary Fund (IMF) to address an artificially appreciated exchange rate.This devaluation exceeded 50% and initially triggered a important rise in the exchange rate. previously, the exchange gap with parallel markets had reached nearly 200% under the Alberto Fernández administration, but fell to 30-40% following the devaluation, signaling increased confidence in economic policy. That gap has since narrowed to under 10%, though a recent setback in a local election in Buenos Aires province caused a renewed depreciation of the peso.
“The increase of the dollar in Argentina was deliberate, agreed with the IMF, because the weight was artificially appreciated,” explained analyst Velandia.”In Colombia, though, volatility has responded more to local policy and the noise of reforms.”
Colombia experienced an opposing trend. After the colombian peso exceeded COP $5,400 in 2023, it moderated in 2024 and 2025, fueled by expectations of interest rate cuts in the United States and intervention by the Bank of the Republic. The peso’s appreciation to COP $3,800 provided relief from inflationary pressures, though fiscal risk remains a concern. The approaching presidential elections and the potential for a market-pleasant shift in government have further bolstered the peso.
Petro’s administration prioritized reducing unemployment, but this came at the cost of fiscal deterioration, raising concerns about long-term sustainability. Milei, conversely, has focused on stabilizing critical variables, albeit at a significant social cost.
“It is indeed almost impractical to award the results to the presidents directly: in Colombia global and regional factors weigh, and in Argentina the bet was a shock with visible effects in the short term,” Velandia concluded.
Analysts emphasize the difficulty of directly attributing outcomes to either president, citing the influence of external factors in Colombia and the immediate impact of Argentina’s “shock therapy” approach.The contrasting models – libertarian austerity versus progressive social spending – present a complex case study in economic policy and its consequences.