Argentina's Javier Milei Ends Deficit for the First Time In 123 Years

Sarah Arnold | December 11, 2024 7:30 PM

Argentina's fiscal deficit has been a persistent challenge for its economy, driven by structural inefficiencies, spending, and limited revenue generation. As a result, the government must borrow or print money to finance the gap, fueling sky-high inflation and undermining its economic stability. However, for the first time in 123 years, President Javier Milei ended the country’s deficit in just one year of his presidency.

When Milei took office on December 10, 2023, he promised to take a “chainsaw” to the nation’s economy— and that he did.

“The deficit was the root of all our evils—without it, there’s no debt, no emission, no inflation,” Milei said. “This historic achievement came from the greatest adjustment in history and reducing monetary emission to zero. A year ago, a degenerate printed 13 percent of GDP to win an election, fueling inflation. Today, monetary emission is a thing of the past.”

🇦🇷 MILEI: ARGENTINA ENDS DEFICIT FOR THE FIRST TIME IN 123 YEARS

"The deficit was the root of all our evils—without it, there’s no debt, no emission, no inflation.

Today, we have a sustained fiscal surplus, free of default, for the first time in 123 years.

This historic… https://t.co/uszEgPd493 pic.twitter.com/nt5jJGQM1V
— Mario Nawfal (@MarioNawfal) December 11, 2024

Conservatives, especially Elon Musk and Vivek Ramaswamy, have applauded Milei’s economic policies. During his first ten months in office, he cut the state’s spending by 31 percent. The president of Argentina has also overseen significant spending cuts, dismissed tens of thousands of public employees, closed half of the country’s 18 ministries, and devalued the peso by more than 50 percent against the dollar. With the country’s inflation rate nearing over 200 percent, 25 percent in 2023, Milei brought down inflation to a stunning 2.7 percent by October 2024.

Milei’s pro-market reforms have received praise because he promises to de-regulate the economy, reduce bureaucracy, and privatize state-owned enterprises. His policies have been viewed as an example of revitalizing the struggling Argentinian economy and reversing the damage caused by decades of liberal policies.