Argentina’s newly-elected president, Javier Milei, wasted no time in making his mark on Sunday during his inaugural speech. The self-proclaimed dollar-loving libertarian warned the country to brace itself for aggressive fiscal cuts as he aims to rein in sky-high inflation and rescue the economy from its sixth recession in just 10 years.
In his speech, Milei emphasized that there is no alternative to a shock adjustment and repeatedly stated that there is simply no money. With inflation reaching a staggering 143% in October, he has pledged to implement “chainsaw” cuts to bring soaring prices under control.
These fiscal cuts will primarily affect the state rather than the private sector, equivalent to approximately 5% of Argentina’s GDP. Milei aims to make substantial changes that will cut down on government spending and help alleviate the burden on the struggling economy.
Interestingly, Milei did not mention the previously promised replacement of the peso with the US dollar, signaling a potential shift away from this radical proposal. This move showcases his willingness to adopt pragmatic measures to repair Argentina’s broken economy.
In another sign of pragmatism, Milei has appointed moderate rivals to key roles within his Cabinet, indicating a desire to surround himself with experienced individuals who can help navigate the challenging path ahead.
Milei’s overarching goal is to avoid hyperinflation and restore stability to Argentina’s economy. With a track record of six recessions in just 10 years, he understands the urgency of the situation and is determined to implement decisive measures to address these issues head-on.
As Argentina’s new president, Javier Milei has already established himself as a leader who is unafraid to make tough choices. With his focus on aggressive fiscal cuts, a departure from the proposed dollarization of the economy, and the appointment of moderate colleagues, Milei is positioning himself to address the country’s economic woes and put Argentina back on a path towards prosperity. Time will tell if his bold approach will be the catalyst for the much-needed change that the country so desperately needs.
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