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Argentina achieves first quarterly budget surplus in over a decade under President Milei

Argentina achieves first quarterly budget surplus in over a decade under President Milei
By Yagiz Efe Parmaksiz
Apr 23, 2024 11:05 PM

Argentina declares its first quarterly budget surplus since 2008, marking significant change in the country’s economic environment as Milei emphasizes importance of matching government spending with income creation

President Javier Milei declared the nation’s first quarterly budget surplus since 2008, hailing it as a historic achievement and a significant change for Argentina’s economic environment. Speaking to the country on television late Monday, Milei disclosed that Argentina had a budget surplus of almost 275 billion pesos in the first quarter of 2024, roughly $309 million at the official exchange rate, or 0.2 percent of GDP.

Declaring in reference to the early years of his left-wing predecessor, Cristina Kirchner, “This is the first quarter with a financial surplus since 2008,” Milei went on. The self-described “anarcho-capitalist” Milei, who took office in December, highlighted the accomplishment’s worldwide significance and called it a historic achievement.

Emphasizing the fiscal principles of his administration, Milei highlighted how crucial it is to match government spending with income creation in order to control inflation. “Inflation does not occur if the state does not spend more than it takes in and does not print money. “This is not magic,” Milei declared.

Promises to completely eradicate the deficit, a target more ambitious than the criteria imposed by the International Monetary Fund (IMF), which maintains a $44 billion loan deal with Argentina, were the cornerstone of Milei’s electoral triumph in November. Milei has pursued this goal by enacting an austerity program that is marked by large reductions in energy and fuel subsidies for transportation.

Milei is unwavering in his dedication to budgetary restraint even in the face of extreme economic hardships, such as a 290 percent annual inflation rate, a 60 percent poverty rate, and a 20 percent reduction in the purchasing power of wage earners. As a result of this determination, thousands of public employees have lost their employment due to the austerity measures.

Nonetheless, a march against budget cuts to higher public education, research, and science has been organized by university students, supported by unions and opposition parties, in protest of Milei’s strict economic measures, which have created widespread dissatisfaction. Universities have declared a state of fiscal emergency, alerting the public to impending operational issues as they struggle with static budgets in the face of skyrocketing inflation and rising energy expenses.

The rector of the University of Buenos Aires (UBA), Ricardo Gelpi, expressed doubts about the sustainability of the financing levels at present and warned that in the absence of sufficient support, universities would have operational limitations in a few months. The higher education industry is experiencing increased anxiety due to the acceptance of a 2024 budget that is exactly the same as the previous year’s allocation. This indicates that aggressive actions to alleviate financial inequities are urgently needed.

The delicate balancing act between fiscal restraint and social welfare remains a significant issue of dispute as Argentina navigates the complexity of economic recovery under Milei’s leadership, highlighting the complicated problems facing the country’s future.

Source: AFP

Last Updated:  Jun 3, 2024 4:44 PM