Argentine President Javier Milei Announces First Quarter Fiscal Surplus, Criticizes Congress in National Broadcast

In a prime-time national broadcast on Monday, Argentine President Javier Milei announced that the country achieved a rare fiscal surplus of over 275 billion pesos ($315.4 million) in the first quarter of 2024, representing 0.2% of GDP. This marks the first such surplus since 2008.

Milei, a libertarian leader who took office in December, praised the surplus as "the foundation of a new era of prosperity in Argentina, despite encountering resistance from politics, unions, the media, and most economic actors." He attributed the positive financial result to his administration's austerity measures, including slashing transfers to provincial governments, halting public works, and allowing high inflation to erode real public spending on wages and pensions.

During the televised address, Milei was joined by his economic team, including the Economy Minister, Finance Secretary, and Central Bank Governor. He claimed that his "plan is working" to tame profligate public spending and improve the country's economic prospects, which have been marked by triple-digit inflation and a prolonged economic slump.

Why this matters: Argentina has long struggled with economic instability, high inflation, and mounting debt. Milei's announcement of a fiscal surplus, achieved through controversial austerity measures, signals a significant shift in the country's economic policy and could have far-reaching implications for the nation's future.

However, experts caution that the surplus may not be sustainable in the long term, as it relies on short-term measures that cannot be maintained indefinitely. Milei criticized previous governments for the dire economic situation he inherited, describing it as a "hell" and vowing to "give everything to pull this country out." He also promised Argentines that their sacrifice would pay off in the form of lower taxes in the future, as he continues his efforts to eliminate the fiscal deficit.

The president's announcement comes as part of his "economic shock" plan to reverse Argentina's prolonged economic slump and the steady deterioration of the peso currency. Milei stated that his government's plan is working and that they are "more than halfway towards improving the country's economic prospects." The International Monetary Fund has said that Argentina has complied with the goals of the current program, and the eighth revision of the plan will be approved without the need for any waivers.

Key Takeaways

• Argentina achieved a rare fiscal surplus of 275B pesos in Q1 2024.
• Milei attributed the surplus to austerity measures like slashing transfers.
• Experts warn the surplus may not be sustainable long-term.
• Milei vows to eliminate the fiscal deficit and lower taxes.
• IMF says Argentina has complied with goals of the current program.