By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News. November 20, 2024. Article no 1314.

The Argentinian president highlighted the economic direction of his administration. He also referred to Cristina Kirchner and the conviction in the Vialidad case.

Javier Milei, the libertarian President of Argentina, asserted that the country’s economy is experiencing a “flourishing moment,” reflecting on the progress made since he took office in December 2023. His administration has implemented significant economic reforms aimed at stabilizing and revitalizing the economy, which has faced decades of mismanagement, corruption and high inflation.

“The Argentine economy at this time is flourishing. And that is sustained in the long term with structural reforms, which is what we do day by day deregulating the economy,” he stressed.

Economic Progress Under Milei’s Leadership

Fiscal Surplus: For the first time in over a decade, Argentina achieved a fiscal surplus over nine months in a row, indicating a significant turnaround from previous years of deficit spending. This budget surplus was largely attributed to severe austerity measures, including substantial cuts in government spending and subsidies.

Inflation Control: Monthly inflation rates have shown marked improvement, dropping from around 25% at the end of 2023 to approximately 3.5% by September 2024. While annual inflation remains extremely high at around 237%, the reduction in monthly rates has been seen as a positive sign of Milei’s economic policies taking effect.

Argentina’s annual inflation soared to 211.4% at the end of 2023, the highest in 32 years, according to figures released in January 2024 by the government’s INDEC statistics agency.

Now, thanks to the disruptive policy of Javier Milei, Argentina’s inflation slowed to 2.7% in October, the lowest level in three years in a win for the libertarian government of President Javier Milei who came to power almost a year ago promising to pull Argentina out of a dire economic crisis. When he took office in December 2023, monthly inflation surged to 25%.

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Economic Growth: Recent reports indicate that economic activity has increased by 1.3% from April, surpassing analyst expectations. The International Monetary Fund (IMF) has also noted an expected rebound in GDP growth for 2025, suggesting that Milei’s reforms are beginning to yield results. BBVA Research presents an even more optimistic outlook, estimating a 6% rebound in GDP for 2025, driven by increased investment, exports, and private consumption. They highlight signs of recovery in Q3 2024 as real wages begin to rise.

Challenges Ahead ?

Despite these advancements, significant challenges remain. The poverty rate continues to rise as austerity measures have strained many Argentines’ living standards. Protests against spending cuts have emerged, highlighting social discontent amid economic reforms. Additionally, while Milei’s administration has made strides in attracting foreign investment through initiatives like the RIGI framework, the removal of capital controls and further deregulation will be crucial for sustained growth.

Foreign investors can be interested by the Argentinian economy and resources. As demand for batteries booming, lithium has emerged as a vital commodity. Argentina, Chile and Bolivia are home to the “Lithium Triangle,” a region containing nearly 56 percent of the world’s known lithium. Argentina could take advantage of its natural resources to attract foreign investments and create thousands of jobs.

Political Tensions

Javier Milei’s comments also included references to former Vice President Cristina Kirchner and ongoing legal issues related to her administration, particularly the Vialidad case. This context underscores the political tensions in Argentina as Milei navigates both economic reform and a challenging political landscape with a minority in Congress.

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© Copyright 2024 – Eurasia Business News. Article no. 1314.