File picture of Argentina’s President Javier Milei
| Photo Credit: Reuters
Argentina’s government said Friday (January 17, 2025) it had produced the country’s first budget surplus in more than a decade in 2024, after a year of drastic austerity by libertarian President Javier Milei, whose term has also seen inflation fall.
Economy Minister Luis Caputo said the budget surplus, which amounted to 0.3% of GDP, was the first since 2010.
“The promises have been kept. The ‘zero deficit’ is a reality. Long live freedom, goddammit,” Mr. Milei wrote on Instagram.
On the campaign trail in 2023, the self-styled “anarcho-capitalist” economist brandished a chainsaw as a symbol of his plans to slash public spending and tame inflation after years of eye-watering price increases.
Mr. Caputo said the 2024 surplus was the fruit of a reform program “that surprised the whole world.”
Mr. Milei has applied shock therapy to try to stabilise South America’s long-struggling second-biggest economy.
He devalued the national currency by 52%, fired more than 33,000 public sector workers, slashed state subsidies on transport, fuel and energy and led a massive deregulation drive.
His reforms nearly halved annual inflation, which fell 94 points to 117.8% last year but still remains amongst the highest in the world.
Criticism and promises
But his policies also plunged Argentina into recession and tipped an additional five million people into poverty in the first half of 2024, bringing tens of thousands of people onto the streets in protests.
The 54-year-old has swatted away criticism, declaring that what he presents as short-term pain will restore the prosperity Argentina enjoyed in the early 20th century.
His government has forecast an economic rebound in 2025, with GDP growth of 5%.
A fervent admirer of Donald Trump, Milei will attend the Republican’s inauguration for a second term as president next week and also hold talks with International Monetary Fund leader Kristalina Georgieva on a new loan agreement.
The IMF’s current 30-month loan agreement with Argentina expires on December 31, and is worth around $44 billion, making it the largest program it has.
Published – January 18, 2025 02:29 pm IST
