Liberal economist Javier Milei assumed the presidency of Argentina today, Sunday, warning in his first speech that he has no choice but to commit to a sharp and painful financial course to address the country’s worst economic crisis in decades, with inflation heading towards 200 percent. He stated in front of Congress upon taking office, "There is no alternative to making a shocking adjustment... There is no money."
Milei (53) took office succeeding Peronist leader Alberto Fernández, whose government failed to halt rising prices. Milei, a former television analyst known for his fiery speeches against his opponents, China, and the Pope, said, "The outgoing government has left us on the path to hyperinflation... We will do everything we can to avoid such a disaster."
Although the speech did not include any details, Milei mentioned that key steps will include a fiscal adjustment of about five percent of the country's GDP through cuts he said would be borne by "the state, not the private sector."
Milei's economic plan, which is based on sharp spending cuts, has been positively received by investors who see it as a potential path to stabilize the struggling economy, but it risks pushing more residents into financial hardship, as over one-fifth of the population already lives in poverty. Argentina's net foreign currency reserves are estimated to be around $10 billion, and the annual inflation rate has reached 143 percent and is on the rise. A recession is imminent in the country, and capital controls have failed to stabilize exchange rates.
