The Argentine government announced on Friday evening that in January it achieved a monthly budget surplus for the first time in almost 12 years amid tough spending cuts pushed by President Javier Milei.
The first full month in government for the ultra-liberal Milei, who took office in December, ended with a positive balance for the finances of the Argentine public sector: the surplus amounted to about $589 million at the official exchange rate, the result of more income than expenses.
This also includes interest payments on the national debt.
It was the “first (monthly) financial surplus since August 2012 and the first financial surplus in a month of January since 2011,” said the Ministry of Economy, according to the official Télam agency.
“The zero deficit is non-negotiable,” posted Economy Minister Luis Caputo on social media in a message quoting Milei, whose government has committed to the IMF to achieve balanced public finances this year.
“Vaaaamooo Toto!” Milei responded on the same social network using Caputo’s nickname to add his campaign motto, which has also become his government’s slogan: “Long live damn freedom!”
Argentina maintains a $44,000 million loan agreement with the Monetary Fund and within this framework, a zero budget deficit is the main goal of the government of Milei, an economist who advocates a sharp cut in public spending and the reduction of government liabilities on the way to dollarization of the economy.
After a 50% devaluation of the peso, price liberalization and sharp interest rate increases, inflation in January in Argentina reached 20.6% and the 12-month price increase was 254.2%.
The year 2023, the last year of Alberto Fernández’s government, ended with inflation of 211%.
According to official figures, 45% of the population is affected by poverty.
Milei expects the economy to recover in about three months.
“It will be a kind of ‘V’, a first section that falls, with the most difficult moment around March-April, when you hit bottom and then start bouncing back, and when you remove the currency controls (restrictions on access to dollars maintained since 2019), the economy will take off,” he estimated.
AFP