2024-02-18 05:57:37
Argentina records its first monthly budget surplus in 12 years due to spending cuts
The Argentine Ministry of Economy announced that the government recorded its first surplus in nearly 12 years in January, while President Javier Mele continues to press for spending cuts.
The government said late Friday that January was Milley’s first full month in power after taking office in December, and he ended with a positive public sector finance balance of $589 million in surplus at the official exchange rate, the figure including interest payments on the public debt.
The Ministry of Economy added, according to what was reported by the official Telam news agency, that this “fiscal (monthly) surplus is the first since August 2012, and the first January surplus since 2011.”
Milley is negotiating with the International Monetary Fund, pledging to achieve balance in public finances this year, which prompted the Fund to express its approval to review the $44 billion program presented to Argentina, which will likely allow for the disbursement of a loan worth larger than expected.
The International Monetary Fund said, in a statement last month, that the agreement would enable Argentina to obtain $4.7 billion, if it received the support of the Fund’s Executive Board.
Economy Minister Luis Caputo said Friday on the X platform that “zero deficit is non-negotiable.”
Milley, an economist, has called for sharp spending cuts and public debt reduction on the way to dollarizing the economy.
Economists believe that the “sharp reduction in public spending” means harming the interests of millions of people who depend on the state, including many public sector employees, the poor who receive unemployment benefits, and those who benefit from energy, transportation, food, and other subsidies. That’s one of the things.
The government, for its part, considers that the equation is simple, as “there is no alternative” to reforms and austerity policies to straighten out the accounts of a country burdened by debt and a budget deficit equal to 2.9% of GDP in 2023, and to ensure the stability of an economy strangled by inflation at 211% per year.
After a 50% devaluation of the peso, the lifting of price controls and an increase in interest rates, Argentina saw an inflation rate of 20.6% for January, with an annual rate of 254.2%.
With poverty affecting 45% of the population, Milley predicted an economic recovery within three months.
(AFP, Al-Arabi Al-Jadeed)
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