Argentine President Javier Milei said on Thursday that the country’s economy is on the mend despite facing its toughest adjustment yet, Argentine media reported.
Speaking at the Agroactiva trade fair in Armstrong, Santa Fe, he criticised laws passed by Congress that threaten his economic reforms aimed at maintaining a budget surplus.
Milei is pushing for legislation that would make issuing currency a crime against humanity. He has promised to veto any policy that would jeopardise fiscal stability, insisting on a zero deficit and ready to cut government spending if necessary.
The president believes such a tough approach is vital for Argentina, a country that has long been plagued by economic problems. Speaking of economic progress, Milei also said that maintaining a budget surplus would allow for tax cuts. He remains optimistic about implementing 3,200 structural reforms, aiming to turn Argentina into a world-leading economy within 30-40 years.
In a significant development, annual inflation fell sharply to single-digit monthly rates, a record high. In April, annual inflation stood at 289.4 per cent and monthly inflation fell to 8.8 per cent, the first since last October, INDEC said.
Inflation continues to fall
Argentine economic activity fell 8.4 per cent in March and 5.3 per cent in the first quarter, but Milei says inflation continues to fall and the economy is recovering.
Milei also has halved ministerial staff, ended unnecessary public works, halted discretionary funding to provinces and launched a major social spending reform. He believes these steps are necessary to capitalise on the economy’s growth potential.
Meanwhile, key industries such as mining, oil and gas and agriculture are thriving and real wages have risen for two consecutive months. These improvements hint at a possible reduction in poverty and deprivation. At the end of the year, the urban poverty rate stood at 41.7 per cent, slightly higher than the previous measurement.
Milei’s shock measures
Milei, who took office as president on December 10 2023, in his first speech as head of state, described the situation in the country as critical and said shock measures were needed in the economy. The libertarian politician favours minimal state intervention in the economy and sees the solution to Argentina’s economic problems in getting rid of the budget deficit by cutting spending.
According to researchers at the Catholic University of Argentina, the country’s poverty rate rose to 55 per cent in the first trimester of the year amid the Milei government’s shock measures. The figure stood at 49.5 per cent in December.
Earlier, Milei said he had turned down a trip to Switzerland for a conference on Ukraine scheduled for June 15-16. He said he decided to stay in Argentina to celebrate the country’s National Day of Latin American Freedom and Flag Day on June 17-20.
