Argentina Announces First Monthly Budget Surplus in 12 Years

The Argentine government recorded a monthly budget surplus in January 2024, according to official reports.

This development coincides with President Javier Milei's ongoing efforts to strengthen Argentina's global position.

Confirming this latest development, the office of the president stated that:

“For the first time since August 2012, the national government spends less than it earns,” and covers debt interest costs without sending the public account “in the red.” A situation that benefits “all Argentines: it allows us to put an end to issuance, begin to reduce inflation, and trace the path to reducing taxes. This is the program that President Javier Milei promised the Argentine people, the one that he is carrying forward despite the constant attack of those who see their privileges being put in danger. There is no question of a zero deficit.”

Milei's Government Recent Reforms

Argentina's pro-bitcoin president Javier Milei slashed government spending that many far-right supporters believed had turned the country into a socialist nightmare;and  he reduced the number of government cabinet posts  from twenty-one to twelve and the number of ministries from eighteen to nine.

The result of this decision is a public surplus of 518.4 billion pesos (the equivalent of approximately 578 million Euros).

The far-right libertarian has also made some significant moves that are transforming the country. He eliminated crony contracts and activist handouts, cut bureaucratic regulation that led to the increase in apartment for rent in Buenos Aires, bringing down rent costs.

Despite Milei’s successes, he continues to face opposition from socialist groups that are against privatization efforts and his government is hampered by high court decisions striking down labor law reforms.

Furthermore, the pro-Bitcoin president has a more daunting task: Tackling hyperinflation, a problem that has continued to cripple the country's economy.

Argentina's Crippling Inflation

According to official data,Argentina's inflation is now two times worse than that of Venezuela. The monthly inflation rate in Argentina is currently 20.6%, with a 12-month rate of 254%, far higher than that of Venezuela, sitting around 121%.

This inflation is partly due to a fall in GDP and an earlier sharp fall in production. Javier Milei has been in power for just two months and is trying to do a major reversal that will bring the country out of its economic woe that is caused by decades of money printing by the previous socialist administration.

Argentina is in a very tight spot, but if Javier Milei should succeed, his effort could have broader implications, potentially inspiring similar government reduction initiatives in other Latin American countries and globally.