In a surprising turn of events, Argentina, under the leadership of its new far-right president, Javier Milei, has marked its first monthly budget surplus in over a decade. The milestone, while significant, comes at a considerable cost as Milei continues to implement sweeping measures aimed at curbing government spending and addressing inflation.
The Argentine government, led by President Milei, reported a budget surplus of $589 million at the official exchange rate for January, marking the first positive balance in public-sector finances since August 2012. This achievement is particularly noteworthy as it also represents the first monthly surplus for a January since 2011.
Milei assumed office in December, has been steadfast in his pursuit of substantial spending cuts. The January surplus is attributed to a 256.9% increase in tax revenue and a 50.3% reduction in public spending. Despite this positive development, many economic challenges persist, and the long-term impact of Milei’s strategy remains uncertain.
Negotiations with the International Monetary Fund (IMF) over Argentina’s $44 billion loan have been ongoing, and Milei has pledged to achieve a balanced budget in public finances this year. Economy Minister Luis Caputo emphasized that “the zero deficit is not negotiable,” signaling a commitment to fiscal responsibility.
Sources:
https://www.express.co.uk/news/world/1868460/argentina-milei-inflation-government-surplus
https://www.straitstimes.com/world/argentina-sees-first-monthly-budget-surplus-in-12-years
https://www.barrons.com/news/argentina-sees-first-monthly-budget-surplus-in-12-years-a148e46a
https://www.emergingreal.com/post/milei-achieves-first-budget-surplus-in-argentina-in-12-years