Ultraliberal President Javier MileiAFP
Published 04/23/2024 10:49
President Javier Milei celebrated this Monday (22) as a “historic feat” the first quarter with a financial surplus that Argentina has recorded since 2008 and warned the population not to expect an exit from the recession “hand in hand with public spending” .
In March, the public sector recorded a financial surplus of more than 275 billion pesos (US$309 million dollars, R$1.60 billion, at the official exchange rate), “thus achieving, and after more than almost 20 years , a financial surplus of 0.2% of GDP during the first quarter of the year”, said Milei on national television.
“It is the first quarter with a financial surplus since 2008”, he continued, referring to the first year of government of his political rival, Cristina Kirchner.
Having achieved this “in just three months of government is simply a feat of historic proportions at a global level”, estimated Milei.
The president took office in December determined to reduce the fiscal deficit to zero, a more ambitious target than that imposed by the International Monetary Fund (IMF) itself, with which Argentina has a credit agreement of US$44 billion (R$229 billion).
To this end, he undertook a draconian adjustment that included, among others, the halting of public works, layoffs of employees, closing of government facilities, cutting subsidies, increasing public tariffs and freezing budgets at times when inflation was on the verge of 290% per year and poverty affects half of the population.
“If the State does not spend more than it collects and does not resort to issuance, there is no inflation. It is not magic”, expressed Milei, an ultra-liberal economist who defines himself as an “anarcho-capitalist”.
Economist Carlos Melconian, a critic of the government, told journalists this Monday that it is necessary to analyze “how to continue the story, because the mechanism by which positive numbers were found is difficult to sustain over time.”
Argentina’s economic activity fell -4.5% in December from the previous year and -4.3% in January, according to the state statistics institute. This Tuesday the February number will be released, which analysts expect to be equally high.
The public university, one of the sectors most affected by the adjustment, called a demonstration for Tuesday that is anticipated to be massive in protest for the update of its budget, without which – its authorities say – the institution will not be able to function beyond the next two or three months.
“Don’t expect to go hand in hand with public spending”, warned the president, without referring directly to this conflict. “The era of the supposed present state is over.”
He did not refer to the ongoing negotiations with the IMF nor to a possible exit from Argentina’s complex exchange control, which, according to the president, could be released this year if an additional loan of US$15 billion (R$78 billion) was obtained. .
