The president Javier Milei wrote a column in the renowned publication The Economistwhich he echoed this Friday on his social networks. With a photo from the newspaper, the president called himself a ”neighborhood phenomenon” by showing the writing where he talks about the realization of ”an economic miracle” in Argentina.
In the text, Milei makes a review of the economic situation of the country from the levels of ”excess monetary liquidity” that caused the ”infamous Rodrigazo”, to the ”free fall” of the GDP ”for 15 years”. And he adds: ”In the face of imminent disaster, The only possible solution was to act quickly and decisively.. “We began by cutting public spending by 30% in real terms, achieving fiscal balance in our first month in office.”
Under that line, commented the Currency devaluation and increased taxes on importswhich managed to reduce ”the black market premium from more than 100% to a more manageable 25%,” and highlighted that ”country risk, a measure of default risk, plummeted by 40% and inflation Monthly wholesale prices (which shot up to 54% in December 2023) fell to 2%.”
”Our main policy is the search for a balanced budget”he remarked. Thus, he assured that fiscal solvency will be restored and that this will lead – along with the payment of outstanding external debts – to the ”The country’s risk premiums should gradually disappear, paving the way for higher savings, higher productivity and real wage growth”.
Then, he commented on the different phases of monetary policy, detailing that they are currently in the third: ”We have reduced reserve purchases, thus stopping this remaining source of money printing.” This, as he explains, for avoid “a risk of monetary expansion greater than acceptable”.
The economic ”miracle”
”Economic growth is road to recoverydriven by both cyclical and structural factors. After a sharp decline, private sector wages and pensions are rising, boosting aggregate demand and higher capacity utilization,” among other things.
He also cited a program of structural reforms and the elimination of rent control laws; as well as the reduction of country risk premiums, which “acts as a powerful catalyst for savings and investment.”
Finally, he looked to the future: ”What awaits us in 2025 is more of what we have already done: strict fiscal balance, no monetary growth and deregulation. Argentina has suffered an overdose of deficits, money printing and useless regulations. All that has to go away. “As we pursue smaller government, fiscal consolidation will have to deepen.”
”We have made important progress, but there is still much to do. If we succeed, many might call our achievements a “miracle,” but it is not a miracle: it is the result of governing with macroeconomic prudence and adhering to the principles of economic freedom that have enriched nations. We work to show the world that embracing the ideas of freedom brings prosperity,” he concluded.
Source: Ambito
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