South American Real Estate News

Argentina posted a monthly surplus for the first time in 12 years

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The Argentine government announced this on Friday evening in January, achieving a monthly budget surplus for the first time in almost 12 years amid tough spending cuts pushed by President Javier Milei.

The first full month in government for the ultra-liberal Milei, who took office in December, It ended with a positive balance for the finances of the Argentine public sector: the surplus amounted to about $589 million at the official exchange rate. Product of more income than expenses.

This also includes interest payments on national debt.

It was the “first (monthly) financial surplus since August 2012 and the first financial surplus in January since 2011,” said the Ministry of Economy, according to the official Télam agency.

The “zero deficit has not been negotiated,” published Economics Minister Luis Caputo on the social network in a message quoting Milei, whose government has committed to the IMF to achieve balanced public finances this year.

“Vaaaamooo Toto!” Milei responded on the same social network using the nickname Caputo to add his campaign motto, which has also become his government’s slogan: “Long live damn freedom!”

Argentina maintains a $44,000 million loan agreement with the Monetary Fund. Within this framework, a zero budget deficit is the main goal of the government of Milei, an economist who advocates for it a sharp cut in public spending and the reduction of government liabilities on the way to dollarization of the economy.

After a 50% devaluation of the peso, price liberalization and sharp interest rate increases, inflation in January in Argentina reached 20.6% and the 12-month price increase was 254.2%.

The year 2023, the last year of Alberto Fernández’s government, ended with inflation of 211%.

According to official figures, 45% of the population is affected by poverty.

Milei expects the economy to recover in about three months.

“You will do a kind of ‘V’, a first section that falls, with the most difficult moment around March-April, when you hit the bottom and then start jumping, and when you open the traps (restrictions on…). “With access to dollars maintained since 2019, the economy is progressing rapidly,” he estimated.

Source: AFT

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