Argentinian President Milei celebrates: inflation below 10 percent

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Written By Maya Cantina

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Despite inflation of almost 300 percent in the past twelve months, the right-wing government is celebrating its austerity measures. Poverty in Argentina is increasing.

Javier Milei

Argentinian President Javier Milei Photo: David Swanson/Reuters

BUENOS AIRES taz | “GOOOOOOOOOOOOL…!!!,” Argentina’s right-wing populist president Javier Milei rejoiced on Tuesday on platform X. The statistics office had just reported an inflation rate of 8.8 percent for April. The fact that monthly inflation has returned to single digits for the first time in six months has sparked outrage from the office holder since late December.

By falling below the magical limit of 10 percent, Milei has fulfilled one of his election promises. Consumer prices in Argentina have risen by 289.4 percent in the past twelve months. Was the inflation rate rose to 25.5 percent in the first month of Milei’s term, since then it has fallen continuously. A further decline is expected for May. The main reason for this is the libertarian president’s brutal austerity policies, which are strangling demand and consumption and forcing suppliers to keep price increases moderate.

For Milei it is once again a financial success. Country risk for international loans has halved since his election victory, prices of Argentine corporate shares and government bonds have risen, the central bank is building up reserves and in April Milei announced the first quarterly surplus on the budget in more than fifteen years.

This was also achieved through drastic budget cuts. No wonder the International Monetary Fund confirmed on Monday that its main debtor had exceeded its plan. “All performance criteria were exceeded,” the fund wrote in the balance sheet its mandatory quarterly assessment of the country.

May everything go well tomorrow

This means that there is nothing to prevent the IMF from transferring $800 million to the government in Buenos Aires, which the government can use to pay off its obligations to the fund. Argentina is still by far the fund’s largest debtor. The country still has nothing of what was agreed in 2018 Able to repay a $44 billion loan.

While the financial world celebrates Milei and its rigorous austerity policies, the social costs are becoming increasingly severe. Despite falling inflation rates, prices rose by 65 percent in the first four months of the year. For more and more families, their income no longer continues until the end of the month. According to estimates from the renowned University of Torcuato Di Tella, the number of poor increased by 3.2 million between January and March. At the end of March, 22.6 million of Argentina’s 46.8 million lived below the poverty line, which amounts to 735 euros for a family of four.

Nevertheless, there is popular support for his policies in all studies more than 50 percent. Besides the drop in inflation, the main reasons for this are the memory of the previous government, the lack of alternatives – and the desire for everything to go well.



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