Published May 15, 2024
Argentina’s Javier Milei was considered a lunatic and a threat to democracy. The people didn’t care. With inflation soaring through the roof at 300 percent and over 40 percent of the population in poverty, the Argentina electorate saw what leftist economic policy had yielded. They elected Milei, a Trump-like candidate who wielded chainsaws at political rallies, to right the ship. And he’s succeeding in that endeavor. Inflation has dropped to 11 percent, and the country posted its first modest surplus since 2008 (via The Telegraph):
First, what’s changed in the country: inflation has fallen to 11pc and Milei predicts it will fall further. While a monthly figure (this is Argentina after all), price rises may be coming back under control after soaring above 300pc annually.
Last week, Milei announced that the country had recorded its first quarterly budget surplus since 2008, a modest 0.2pc of GDP, but still an astonishing achievement in such a short space of time, especially for a country that has run deficits for 113 of the last 123 years.
Then, earlier this week, the central bank, which Milei has not yet gotten around to abolishing as he pledged, cut interest rates for the third time in three weeks. While they are still at an eye-watering 50pc, that will start to feed through into the economy very soon. Investors have started to notice.
According to Bloomberg data, in the blue-chip swap market the peso was the best-performing currency in the world in the first quarter of this year, and the bond markets are rallying as well.
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So how is he en route to deliver such a massive shock to the stale economic orthodoxy? Fundamentally, he got three big calls right.
First, even without a majority in parliament, he has been ruthless. Whole government departments have been closed down overnight, regardless of the immediate consequences. The Ministry of Culture was axed, so was the anti-discrimination agency, and the state-owned news service. Only last month, he unveiled plans to fire another 70,000 state employees.
Milei hasn’t attempted to cut gradually, to control budgets, or to ease people out with early retirement, or hiring freezes. Instead, he has, as promised, taken a ‘chainsaw’ to the machinery of the state, yielding huge savings in the process.
Next, he has been bold. The president massively devalued the peso on day one, taking the financial hit upfront, and then tore up rent controls, price restrictions and state subsidies. He pared back workers’ rights, reducing maternity leave and severance compensation, and allowed companies to fire workers who went on strike.
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SOURCE: www.townhall.com
RELATED: Argentina reports its first single-digit inflation in six months
Published May 15, 2024
BUENOS AIRES — Argentina’s monthly inflation rate eased sharply to a single-digit rate in April for the first time in half a year, data released Tuesday showed, a closely watched indicator that bolsters President Javier Milei’s severe austerity program aimed at fixing the country’s troubled economy.
Prices rose at a rate of 8.8 percent last month, the Argentine government statistics agency reported, down from a monthly rate of 11 percent in March and well below a peak of 25 percent last December, when Milei became president with a mission to combat Argentina’s dizzying inflation, among the highest in the world.
“Inflation is being pulverized,” Manuel Adorni, the presidential spokesperson, posted on social media platform X after the announcement. “Its death certificate is being signed.”
Although praised by the International Monetary Fund and cheered by market watchers, Milei’s cost-cutting and deregulation campaign has, at least in the short term, squeezed families whose money has plummeted in value while the cost of nearly everything has skyrocketed. Annual inflation, the statistics agency reported Tuesday, climbed slightly to 289.4 percent.
“People are in pain,” said 23-year-old Augustin Perez, a supermarket worker in the suburbs of Buenos Aires who said his rent had soared by 90 percent since Milei deregulated the real estate market and his electricity bill had nearly tripled since the government slashed subsidies. “They say things are getting better, but how? I don’t understand.”
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SOURCE: www.inquirer.net
RELATED: Argentina: Yearly inflation hits 290% as monthly rate slows
Argentina’s monthly inflation rate rose at 8.8%, compared to 11% in March
Published May 15, 2024
Inflation in Argentina slowed for the fourth consecutive month, despite an annual rate nearing 300%, official data showed on Tuesday.
The monthly inflation rate rose at 8.8%, compared to 11% in March.
This is seen as a victory for President Javier Milei who took office in December with monthly inflation at a peak of over 25%, promising to address the rising costs.
“Inflation is being pulverized,” Manuel Adorni, the presidential spokesperson, said on X. “Its death certificate is being signed.”
The yearly inflation rate in April was at 289.4%, slightly higher than the annualized rate a month earlier, the official INDEC statistics agency said
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SOURCE: www.dw.com
