2024-09-16 04:39:39
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Argentina’s libertarian President Javier Milei has announced that he intends to eliminate the budget deficit entirely next year, doubling down on promises of fiscal discipline despite a recession.
Milei turned the annual budget speech, normally a routine event handled by the economy minister, into a live nationwide broadcast from Congress, as he seeks to rally public support for his nine-month administration amid growing pressure to increase spending and a dip in his ratings.
The proposal, which aims for a surplus equivalent to 1.3 per cent of gross domestic product before interest payments in 2025, also makes ambitious projections of an economic rebound and a sharp slowdown in inflation. It forecasts growth of 5 per cent next year, after an expected 3.8 per cent contraction this year. It also forecasts prices rising just 18.3 per cent in the 2025 calendar year after expected inflation of 122.9 per cent this year.
“After years of the political class shackling individual freedoms, today we’re here to shackle the state,” said Milei in a half-empty Congress, amid criticism from the opposition, many of whom stayed away, and the fervent applause of his supporters.
“The decision is yours,” he said to lawmakers in a 43-minute speech. “Citizens will decide whether to place you on the avenue of the righteous or in the corner of the miserable rats who bet against the country.”
Clashes with lawmakers have been fierce in recent days. The government successfully defended its veto on a pension increase law that threatened its austerity programme, which has so far generated a primary surplus of 1.4 per cent of GDP through July. Shortly after, a law to boost university spending was passed, prompting Milei to brace for yet another veto.
“The root of Argentina’s deficit lies in politicians’ insatiable appetite for spending,” said Milei. “We must honour the titanic effort made by Argentines. We will veto any project that jeopardises fiscal balance.”
Underlining his commitment to fiscal discipline, the budget proposal incorporates clauses that would adjust revenues and expenditures to meet the zero-deficit pledge in the event that actual economic growth deviates from the projections.
Antagonising lawmakers has been a cornerstone of Milei’s strategy from the start. Breaking with tradition, he delivered his inaugural address on the steps of Congress, turning his back on lawmakers — a symbolic move in a country where presidents typically deliver their inaugural speeches within its chambers.
“The budget is the heart of Milei’s economic programme, and also his main political challenge,” said Lucas Romero, who runs Argentine political consultancy firm Synopsis. “He has tried to offset his parliamentary weakness with a ‘going public’ strategy: appealing directly to the people to pressure Congress into passing laws.”
Milei also called on provincial administrations to emulate his spending cuts, insisting that an additional $60bn in province-level cuts were necessary.
“It’s a budget aimed at reinforcing fiscal order as the cornerstone of the programme,” said economist Fernando Marull. “It’s a positive step and aims to continue on the same path as before.”
Milei, an economist, took office last December pledging to rescue Argentina from decades of mismanagement by controlling spending tightly and slashing borrowing. However, the country plunged into a technical recession earlier this year, and while there are faint signs of recovery in select sectors, the overall economic downturn has continued unabated.
“The Achilles heel of any austerity programme is social tolerance,” said Romero. “Have Milei’s approval ratings plunged? No, but the downward trend is unmistakable. For him to reverse this trend, it’s crucial that the economic recovery becomes visible sooner rather than later.”
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– What measures does Javier Milei propose to eliminate Argentina’s budget deficit by 2025?
Table of Contents
Argentina’s President Javier Milei Vows to Eliminate Budget Deficit by 2025
In a bold move, Argentina’s libertarian President Javier Milei has announced his intention to eliminate the country’s budget deficit entirely by 2025, despite the current recession. In a live nationwide broadcast from Congress, Milei presented his ambitious plan to achieve fiscal discipline, which includes a surplus equivalent to 1.3% of gross domestic product (GDP) before interest payments in 2025.
Economic Projections and Inflation Forecasts
The proposal also includes optimistic projections of an economic rebound and a sharp slowdown in inflation. Milei’s government forecasts 5% growth in 2025, following an expected 3.8% contraction this year. Inflation is predicted to slow down significantly, from 122.9% this year to 18.3% in 2025.
Fiscal Discipline and Austerity Measures
Milei’s commitment to fiscal discipline is unwavering, as he seeks to break free from Argentina’s history of budget deficits. The budget proposal includes clauses that would adjust revenues and expenditures to meet the zero-deficit pledge in the event of deviations from economic growth projections. The government has already generated a primary surplus of 1.4% of GDP through July, thanks to its austerity programme.
Clashes with Lawmakers and Provincial Administrations
Milei’s approach has not been without controversy, as he has clashed with lawmakers and provincial administrations over spending cuts. The government has vetoed a pension increase law and is bracing for another veto on a university spending bill. Milei has called on provincial administrations to emulate his spending cuts, arguing that an additional $60 billion in province-level cuts are necessary.
Going Public Strategy
To offset his parliamentary weakness, Milei has adopted a “going public” strategy, appealing directly to the people to pressure Congress into passing laws. This approach has been a cornerstone of his presidency, as evidenced by his decision to deliver his inaugural address on the steps of Congress, turning his back on lawmakers.
Expert Analysis
Economists and analysts have praised Milei’s commitment to fiscal discipline, but some have expressed concerns about the feasibility of his ambitious goals. Lucas Romero, who runs Argentine political consultancy firm Synopsis, notes that “the budget is the heart of Milei’s economic programme, and also his main political challenge.” Fernando Marull, an economist, believes that “it’s a budget aimed at reinforcing fiscal order as the cornerstone of the programme… it’s a positive step and aims to continue on the same path as before.”
Conclusion
President Javier Milei’s bold plan to eliminate Argentina’s budget deficit by 2025 is a significant step towards achieving fiscal discipline and rescuing the country from decades of economic instability. While the road ahead will be challenging, Milei’s commitment to his vision is unwavering, and his “going public” strategy is likely to continue shaping the country’s political landscape.
Keywords: Argentina, Javier Milei, budget deficit, fiscal discipline, austerity measures, economic growth, inflation forecasts, presidential election.
Meta Description: Argentina’s President Javier Milei has announced his plan to eliminate the country’s budget deficit by 2025, promising fiscal discipline and economic growth. Read more about his ambitious proposal and its implications for the country’s economy.
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H1: Argentina’s President Javier Milei Vows to Eliminate Budget Deficit by 2025
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What measures is President Javier Milei proposing to eliminate Argentina’s budget deficit by 2025?
Argentina’s President Javier Milei Vows to Eliminate Budget Deficit by 2025
In a bold move, Argentine President Javier Milei has announced plans to eradicate the country’s budget deficit by 2025, a promise that has sparked both applause and criticism. The libertarian leader’s ambitious plan is built on a foundation of fiscal discipline, aiming to achieve a surplus equivalent to 1.3% of gross domestic product (GDP) before interest payments in 2025.
A Nationally Broadcast Address
Milei took an unconventional approach to unveil his budget proposal, delivering a live nationwide broadcast from Congress, a move seen as an effort to rally public support for his administration. In his 43-minute address, the President emphasized the importance of fiscal responsibility, stating, “After years of the political class shackling individual freedoms, today we’re here to shackle the state.”
Economic Projections and Inflation Forecasts
The budget proposal makes ambitious projections, forecasting 5% economic growth in 2025, following an expected 3.8% contraction in 2024. Inflation is expected to slow down significantly, with prices rising by 18.3% in 2025, a stark contrast to the expected 122.9% inflation rate this year.
Clashes with Lawmakers
The proposal has been met with resistance from lawmakers, who have been critical of Milei’s austerity program. The government has successfully defended its veto on a pension increase law, which threatened to derail the fiscal discipline plan. A law to boost university spending was passed, prompting Milei to threaten another veto. The President remains resolute, stating, “The root of Argentina’s deficit lies in politicians’ insatiable appetite for spending. We must honour the titanic effort made by Argentines.”
Commitment to Fiscal Discipline
To ensure the zero-deficit pledge, the budget proposal incorporates clauses that would adjust revenues and expenditures in response to actual economic growth deviating from projections. This commitment to fiscal discipline has been a cornerstone of Milei’s strategy since taking office.
A ‘Going Public’ Strategy
Milei’s approach has been characterized as a ‘going public’ strategy, appealing directly to the people to pressure Congress into passing laws. This tactic has been employed to offset his parliamentary weakness and garner support for his economic program.
Provincial Administrations Called to Action
The President has also called on provincial administrations to emulate his spending cuts, emphasizing the need for an additional $60 billion in province-level cuts.
Expert Analysis
According to Lucas Romero, who runs Argentine political consultancy firm Synopsis, “The budget is the heart of Milei’s economic programme, and also his main political challenge. He has tried to offset his parliamentary weakness with a ‘going public’ strategy: appealing directly to the people to pressure Congress into passing laws.”
As Argentina navigates its economic challenges, President Milei’s bold proposal has set the stage for a critical moment in the country’s fiscal future. Will his commitment to fiscal discipline pay off, or will the opposition’s criticism prove too great to overcome? Only time will tell.
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[Fiscal Discipline: The Key to Argentina’s Recovery](
