Argentina reports fiscal surplus in the first quarter of Milei

BUENOS AIRES (AP) — The pruning of public spending ordered by Argentine President Javier Milei produced a fiscal surplus in the first quarter of his government.

It was the right-wing president himself who confirmed the information on Monday during a recorded message to the population, accompanied by the Minister of Economy, Luis Caputo, and the president of the Central Bank, Santiago Bausilli, among other officials of his economic team.

“During the month of March, the national public sector registered a financial surplus of more than 275,000 million pesos (308 million dollars), thus achieving, after almost 20 years, a financial surplus of 0.2% (of the) GDP during the first quarter of the year,” Milei announced.

The president, an ultra-liberal economist, described the data as “a milestone that should make us all proud as a country, particularly given the resounding legacy we had to take charge of.”

The last time the Argentine State collected more than it spent was in 2008.

“This concept, that of fiscal surplus, which seems simply a technical definition that does not fit the lives of Argentines, is neither more nor less than the only possible starting point to end the inflationary hell once and for all. “remarked the president.

Inflation in March was 11% and registered a year-on-year variation of 288%.

Milei recalled that, upon taking office on December 10 of last year, he inherited a consolidated deficit of more than 15 points of GDP. The ruler implemented a strict adjustment plan, closing ministries, laying off public employees and cutting subsidies. In addition, he devalued the Argentine peso by more than 50% and launched a series of reforms to deregulate the economy after two decades of populist governments.

“We know that there is a long way to go if the State spends less than what it earns. If the State does not spend more than it collects and does not resort to issuance, there is no inflation,” Milei emphasized.

Critics claim that the slowdown in inflation and the financial surplus are the inevitable result of a drop in consumption and the liquefaction of pension and salary income due to adjustment measures. Expert projections show an increase in poverty and unemployment in the first part of this year.

“Do not wait for public spending to come out hand in hand,” the president warned. “The era of the so-called present State is over. It has been a resounding failure that has plunged 60% of the population into poverty and we will never go back to that.”