“I want to tell all Argentines that the situation we are experiencing is hard, but also that we have already gone more than halfway,” the Argentine president, Javier Milei, stated this Monday night in a message recorded with the which has interrupted the usual programming of open television. In his third speech broadcast on national television since assuming the presidency, Milei celebrated that Argentina has recorded three months without a fiscal deficit, something that the country had not seen since 2008, during the first year of Cristina Kirchner’s mandate (2007-2015). and that his Government has achieved a financial surplus of 0.2% of GDP during the first quarter of the year. “This economic miracle responds to what we called a chainsaw during the campaign,” said Milei. “Despite the opposition of a good part of the establishment political and economic of Argentina, to those who systematically question our ideas and trumpet our failure to return to power, our plan is working.”
Milei had recorded the message this Monday afternoon in the face of great expectations: on Friday, at a business forum, he had announced that he had economic announcements, and he chose to give them on the eve of the call for massive protests that are expected in the streets of the main cities of the country this Tuesday due to cuts in public education. She had no announcements, but the president has taken the opportunity to defend his fiscal adjustment accompanied by his Minister of Economy, Luis Caputo, and the authorities of the Central Bank. “The zero deficit is not just a slogan of marketing for this Government, but it is a commandment,” said the president in an electoral tone. “The era of the so-called present state is over. “It has been a resounding failure that has plunged 60% of the population into poverty.”
The adjustment that Milei celebrated this Monday has been largely based on large cuts that include transfers to the provinces, the brake on public works and the liquefaction of pensions and social plans thanks to inflation, which accumulates more than 60% since December. In the first quarter of the year, the Government cut the transfer of federal funds to the provinces by 62% compared to the same period in 2023, according to the Argentine Association of Budget and Public Financial Administration (ASAP), a non-governmental organization that monitors public expenditure. In its latest report, ASAP reports other reductions during the same quarter: 67% in energy subsidies, 32% in the university budget or 38% in transfers to the retirees’ health service.
Pensions have been the first major obstacle that the Government faced these months. In March, 38% of the cut went to pensions, which has made retirees the first line of Milei’s adjustment at the start of his mandate. In the first three months of the year, prices rose on average by 70% and medicines by 77%; Pensions and retirements, on the other hand, have only increased by 27%, with the exception of the minimum – about $230 – to which a bonus has been added to prevent it from falling below the poverty line.
“Of the five points of the Treasury deficit that we have adjusted, only 0.4% responds to the loss of purchasing power of pensions. The remaining 4.6% adjustment that we have achieved is entirely due to the cut in public spending that politics used indiscriminately to buy wills,” Milei justified.
“For the first time in a long time, the cost of adjustment is not passed on to the majority of the population,” stated the president. Poverty in Argentina has risen eight points this year and has reached, according to private studies, almost 60% of the population.
The president had announced that he would make this announcement last Friday, when he gave a speech at the Llao Llao forum, which brings together the country’s most important businessmen every year in the Patagonian city of Bariloche. There, Milei celebrated that his Government is carrying out “the largest fiscal adjustment in humanity,” and described as “heroes” the Argentine businessmen who “escaped the clutches of the State” by fleeing capital in the face of the exchange restrictions that marked the last two decades of economic instability. Milei insisted on portraying himself as an outsider in the political arena who came to the Government inheriting “the worst crisis in history” and that his Government was “generating the conditions for Argentina to grow again.” “Guys, at some point you’re going to have to buckle down and invest,” he told them at the end of his speech.
While Milei spoke in Llao Llao, the International Monetary Fund praised his results against inflation and the accumulation of reserves in the Central Bank. “The authority’s stabilization plan has given better results than we expected, than those we obtained in our last review of the program [en enero]. We have the first fiscal surplus in a decade,” said the director of the IMF’s Western Hemisphere Department, Rodrigo Valdés, at a press conference. “The Central Bank’s balance sheet is strengthening and inflation, although still high, is falling more quickly than we anticipated,” Valdés said. Argentina will face in May the eighth review of the payment plan that the Peronist Government agreed to in 2022 on the debt of 44,000 million dollars that President Mauricio Macri had acquired in 2018. Milei, who had promised a “greater” adjustment than that of the IMF and which promised to reverse the fiscal deficit by the end of 2024, arrives at its second major meeting with the IMF with that endorsement.
Street protests
The announcement came on the eve of what is expected to be one of the largest street demonstrations against the Government. This Tuesday, students and teachers from public universities throughout the country have called for demonstrations against the adjustment, which has led these institutions to announce that, with the budgets extended from last year in the face of year-on-year inflation that triples costs, they will not They have resources to face the second half of this year. The Government announced last week that it had reached an agreement with universities to adjust their budget for administrative expenses between March and April, but the rectors of many of them have stated that the problem lies in the freezing of teachers’ salaries. which represent the majority of the budget.
The demonstration, which will be replicated throughout the country, will have its center in a massive mobilization in Buenos Aires. Thousands of people will march from points such as the Faculty of Medicine or Law of the University of Buenos Aires and Congress towards the Casa Rosada. The Government has stated that it is “incentivized by politics” and has opened the door to implementing its repression protocol against street closures. The pulse will be on how many people decide to take to the streets at a time when social unrest is growing, but the Government defends its popular legitimacy to continue with the adjustment. From the General Confederation of Labor to some groups of students from private universities, they have called to demonstrate this Tuesday in defense of public education.
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