Argentine –
Milei government trumpets budget surplus
The Argentine government boasted on Friday of a budget surplus not seen in 14 years.
AFP
Published today at 11:13 p.m. Updated 6 minutes ago
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Argentina closed the year 2024 with a surplus in public accounts for the first time since 2010, due to the policy of severe budgetary austerity applied for a year by ultraliberal President Javier Milei.
Economy Minister Luis Caputo announced on Friday on his X account a budget surplus of 0.3% of GDP for 2024, “the first annual financial surplus in 14 years” which “must be understood as an event in our history” , he trumpeted.
“Promises are kept. “Zero deficit” is a reality. Long live freedom, damn it!” wrote Javier Milei on Instagram, recalling his 2023 presidential campaign promises, when he brandished a chainsaw during his meetings illustrating his desire for drastic cuts in public spending.
Shock therapy
According to the Argentine Institute of Fiscal Analysis, the government made an adjustment of around 4.7% of GDP, after 2023 ended with a budget deficit of 4.4% of GDP.
The surplus reached in 2024 is the result of “a stabilization program that surprised the whole world,” estimated Luis Caputo.
-In power for 13 months, Javier Milei, an “anarcho-capitalist” and “state-hating” economist, applied shock therapy involving a 52% devaluation of the peso, cuts in public spending – subsidies, construction sites, jobs – and protean deregulation.
A fall in consumption
Chronic inflation has been halved, although remaining one of the highest in the world: +117.8% for the year 2024, compared to +211.4% in 2023.
This policy had the corollary of a fall in consumption and more generally in activity, anchoring Argentina in recession (GDP down 2.1% year-on-year in the 3rd quarter).
More than 250,000 jobs were lost between private and public, and poverty jumped (52.9% in the first half), even if it fell in the second half, in controversial proportions, government and social observatories not being agree on the numbers.
Argentina’s president to attend Donald Trump’s inauguration
The government is counting on a rebound in economic activity in 2025 with growth of 5%, a forecast in line with that of the IMF. The announcement of the 2024 budget balance comes on the eve of a tour by Javier Milei to the United States and then to Davos.
In Washington, the Argentine president is due to attend the inauguration of Donald Trump and meet Sunday with IMF Managing Director Kristalina Georgieva.
Argentina and the Fund are in negotiations for a new aid plan for the South American country, the previous one for a total amount of 44 billion dollars (40.2 billion Swiss francs) having expired at the end of 2024.
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