Argentina’s recently elected President Javier Milei has announced the country’s first quarterly budget surplus in 16 years, hailing it as an “historic achievement.”
In the first quarter of 2024, Argentina recorded a budget surplus of around 275 billion pesos (roughly $309 million at the official rate) – representing its first budget surplus since 2008 – Milei told the country’s media on Monday. This was a surplus of 0.2 per cent of GDP.
It is the third monthly fiscal surplus for Argentina, a country which is facing an annual inflation rate of close to 300 per cent, with the result a reflection of Milei’s sharp focus on cost-cutting since he became President in December. The embattled country has had 113 annual deficits in the last 123 years, despite once being a global economic power, according to Milei.
Milei, in a speech given on Monday night, said: “Zero deficit isn’t just a marketing slogan for this government, it is a commandment.”
“The fiscal surplus is the cornerstone from which we will build the new era of prosperity in Argentina,” he added. Celebrating the achievement, he described it as “a feat of historic significance on a global scale.”
“We are making possible the impossible even with the majority of politics, unions, the media and most economic actors against us,” Milei declared during his address at the Presidential palace in Buenos Aires.
“If the state does not spend more than it collects and does not issue (money), there is no inflation. This is not magic,” Milei added.
The self-described “anarcho-capitalist,” when elected at the end of last year, advocated for a “a limited government, respect for private property and free trade,” declaring that, “The model of decadence has come to an end.”
Milei was elected by securing 56 per cent of the vote, with a margin of nearly 3 million votes, after promising to promote a strong cut in public spending and to sell of State assets; His brandishing of a chainsaw during his election campaign was symbolic of his goal to slash public spending and shrink the government, amid serious economic woes in the country.
He famously said last year: “The State does not create wealth. The State destroys it. The State can give you nothing, because it produces nothing” in a takedown of economic socialism. The economist has proposed the dollarisation of Argentina, replacing the peso with the US dollar, in a radical bid to decrease inflation in the South American country.
In a note posted to social media, consulting firm Capital Economics praised Milei’s progress, writing: “Argentina’s better-than-expected budget figures at the start of the year are undoubtedly good news and show that fiscal adjustment is occurring more quickly than we’d expected.”
Elected on a promise of taking a chainsaw to public spending, Milei has continued to defend his approach amid protests over education cuts in the country.
On Wednesday, large crowds of demonstrators took to the streets, including students, university professors, trade unions, and opposition parties to protest against Milei’s austerity measures at public universities.
The University of Buenos Aires has claimed that more than 500,000 people took part in the protest in the capital alone, with protests unfolding not only in the capital, but in cities across Argentina. In a bid to put right economic woes, President Milei has shuttered state ministries, defunded cultural centres, and laid off state workers in the four months since taking office.
However, Argentine Universities have declared a budget emergency, amid an increase in energy costs close to 500 per cent, with higher learning institutions saying they are struggling to survive, following recent budget cuts of 71 per cent at public universities.
“At the rate at which they are funding us, we can only function between two and three more months,” University of Buenos Aires (UBA) rector Ricardo Gelpi said this week.
Nobel Peace Prize winner Adolfo Porez Esquivel, who addressed a rally in front of government buildings, said protesters would not give up, declaring: “We are defending the public, open and free university, which is one of the great achievements of our people and which we will not give up.”
President Milei has previously hit out at universities in the country as bastions of socialism, where professors “indoctrinate” students – while also accusing his political opponents of brewing discontent.
“The cognitive dissonance that brainwashing generates in public education is tremendous,” he said.