MercoPress. South Atlantic News Agency

Milei praises his own administration for its financial surplus

“Inflation is theft. Zero deficit is a commandment,” Milei insisted

Argentine President Javier Milei Monday highlighted his administration's performance bringing about a financial surplus worth AR$ 276.638 billion (US$ 276.638 million), which constituted a “historical feat.” He also said this achievement of three consecutive surplus-yielding months -something unheard of since 2008- was possible thanks to his administration's “chainsaw” policies cutting State expenditures. Argentina's economic performance fell well within the goals agreed upon with the International Monetary Fund (IMF).

Together with Milei during the recording of his message were Economy Minister Luis Toto Caputo and Central Bank (BCRA) President Santiago Bausili, BCRA Vice President Vladimir Werning, and Finances Secretary Pablo Quirno.

The first quarter of 2024 cumulative reflects a surplus after interest of approximately 0.2% of Gross Domestic Product (GDP), with a primary surplus close to 0.6% of GDP, Milei explained. “This economic miracle responds to the chainsaw,” he added. Fiscal order is one of the pillars of this economic program, Milei also explained.

In a brief message, which was recorded this afternoon in the White Room of the Government House and in which he was escorted by the Minister of Economy Luis Caputo, the President of the Central Bank Santiago Bausili and his, plus the Secretary of Finance Pablo Quirno, the Head of State stated that “I understand that the situation we are going through is hard, we have already gone halfway. This time the effort will be worth it.” He added that “months ago” such an accomplishment “seemed impossible.”

“Contrary to the forecasts made by most political leaders, professional economists, television, and pettifoggers, I would like to announce that the national public sector recorded a financial surplus of more than 275 billion pesos. This is 0.2% of the GDP. It is the first since 2008. It is neither more nor less than the only starting point to put an end to the inflationary hell. It is plainly a world-class feat,” Milei said.

“This economic miracle that has been to achieve quarterly financial surplus after almost 20 years, having received the inheritance we received, responds to what those who want the failure of this government usually claim, to a huge extent to what during the campaign we called chainsaw, and not as some say to the liquefaction of public spending, a method that has historically been used in our country”, he went on.

“We are making the impossible possible, with the majority of politics, unions, journalists, and economic actors against us. Inflation is plummeting and is every month lower than expected. The requirement is to guarantee a solid and stable economic order. So that Argentines can associate, trade freely, and carry out their life project. Free prices and clear signals to be able to plan and invest. That is the task of the State, to generate the basic conditions,” the Libertarian economist insisted while warning those who expect spending to go up at some point that “that will never happen in our Government.”

“Inflation is theft. Zero deficit is a commandment. This means that every peso will be returned through tax reductions. Savings and tax reductions until we have a level of spending in line with that of a country that needs to grow,” he underlined. According to Milei, Argentina's monthly retail inflation “is around 5%” now that “the cost of the adjustment is not passed on to the entire Argentine population, but only to those who benefited from the impoverishing model of the past.”

“Don't wait for the exit of the hand of public spending. We will never go back to that. The way out is through the private sector and credit financed by savings,” Milei reckoned.

In this scenario and according to Casa Rosada rumors picked up by local media, Argentina might be brokering a new deal with the IMF.

Milei made these announcements on the eve of a planned demonstration nationwide by college students and professors opposing budgetary cuts to the tuition-free national universities. The protest might herald the beginning of a new phase in Argentine politics. The president is a newcomer to politics, having served two years as a Congressman before being elected. La Libertad Avanza (LLA) thus needed to reach a partnership with former President Mauricio Macri's Propuesta Republicana (PRO) to win the runoff against Sergio Massa.

But many Argentines who voted for him in November are regretting their decision given the sharp increase in the price of products measured in US dollars at a pace not matched by income adjustments. Hence, the magnitude of Tuesday's protest might shape up an opposition bloc seeking to win over the impoverished population.