The President of the Argentine Republic Javier Milei speaks for the first time to all Argentines from the balcony of the Casa Rosada. December 10, 2023. Photo courtesy of the Office of the President of Argentina.
New Argentinian President Javier Milei has made major progress in taming the country’s severe inflation. Perhaps Joe Biden could learns something from the success of Milei’s libertarian policy measures. Kim Hjelmgaard reports in USA Today:
Argentina’s chainsaw-wielding, self-proclaimed “anarcho-capitalist” president who says he takes most of his political advice from his dogs has appeared to achieve what many political analysts and economists said his radical plans almost certainly wouldn’t: modest improvements to the country’s economy.
Javier Milei, 53, a former right-wing economist and television pundit whose combative style and embrace of conspiracy theories has drawn comparisons to Donald Trump, took power in December.
Five months since he was sworn in, Argentina still has one of the world’s highest annual inflation rates − a cumulative figure of 287% as of March, according to Bloomberg data − but Milei’s libertarian-laced austerity “shock” measures have translated into lower inflation rates every month for the last three months.
And when national inflation figures for April are released next week there are some indications that Argentina’s economy could see a return to a single digit monthly inflation rate for the first time since October 2023.
In his first weeks in charge, Milei made deep spending cuts to Argentina’s public sector, halted new infrastructure projects, reduced energy and transportation subsidies for residents and cut in half the number of Argentina’s federal ministries. He also devalued the nation’s peso currency by more than 50% against the U.S. dollar.
Ian Bremmer, the founder of the Eurasia Group political and economic risk consultancy, wrote in an emailed newsletter late Wednesday that when Milei was elected, many experts expected his plans for the economy would lead to “further collapse in short order.”
“Thankfully for the people of Argentina, that didn’t happen,” he wrote. “Monthly inflation has come down every month for the past three months, from 25% in December to nearly 10% in March, with forecasters expecting the April figure to come in at single digits. The government did this by turning the 5.5% budget deficit it inherited into the country’s first surplus in over a decade, while boosting the central bank’s reserves, lowering its benchmark interest rates, and reducing the money supply − all without destabilizing currency and financial markets.”
Read more here.
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