Milei announces Argentina’s first budget surplus in 16 years

BUENOS, Aires — Argentina’s spending-slashing new President Javier Milei has hailed his country’s first quarterly budget surplus since 2008 as a “historic achievement.”

In the first quarter of 2024, the South American country recorded a budget surplus of about 275 billion pesos (some $309 million at the official rate), he told national TV late Monday.

This amounted to a surplus of 0.2 percent of GDP.

“This is the first quarter with a financial surplus since 2008,” said Milei, referring to his left-wing rival Cristina Kirchner’s first year in the presidency.

Milei, who took office in December, boasted of “a feat of historic significance on a global scale.”

READ: Poverty in Argentina hits 20-year high at 57.4%, study says

“If the state does not spend more than it collects and does not issue (money), there is no inflation. This is not magic,” the self-described “anarcho-capitalist” said.

Promise to cut deficit to zero

Milei won elections last November vowing to reduce the deficit to zero — a target even more ambitious than required by the International Monetary Fund, with whom Argentina has a $44 billion loan.

To that end, he has instituted an austerity program that has seen the government slash subsidies for transport fuel and energy even as annual inflation stands at 290 percent year-on-year, poverty levels have reached 60 percent and wage-earners have lost a fifth of their purchasing power.

READ: Argentine economy contracted 1.6% in 2023

Thousands of public servants have lost their jobs.

“Don’t expect a way out through public spending,” Milei warned on Monday.

University students, backed by unions and opposition parties, have called a march for Tuesday to protest financing cuts to higher public education, research, and science under the new president.

Universities have declared a budgetary emergency after the government approved a 2024 budget the same as the one for 2023, despite inflation approaching 300 percent and a nearly 500 percent increase in energy costs that higher learning institutions say has brought them to their knees.

“At the rate at which they are funding us, we can only function between two and three more months,” University of Buenos Aires (UBA) rector Ricardo Gelpi said.