O Plano de Milei para Salvar a Argentina Está Funcionando?

Summary

The script discusses Argentina's inflation rates from December 2023 to July 2024, noting a significant drop but still high at 23%. Despite criticism over unemployment, consumption decline, and public sector wage cuts, President Milei's popularity remains high. His administration has made drastic public spending cuts, devalued the peso, and removed price controls, yet maintains a strong peso policy. The government's central idea is that no underdeveloped country has become developed with public spending over 30% of GDP, which Argentina nearly reached in 2022. Milei's approval rating stands at 52%, higher than his predecessor's. The script also touches on the challenges of balancing economic measures with maintaining popularity and the impact of austerity measures on investors.

Takeaways

• 📉 Inflation in Argentina has decreased from December 2023 to July 2024, reaching the lowest level since President Javier Milei took office, but still stands at 23%.
• 🔍 Despite criticism over unemployment, consumption decline, pension and public sector wage cuts, President Milei remains popular, with people still having faith in his economic reforms.
• 🏗️ Almost all public works projects have been suspended, and the Argentine peso has devalued by over 50% under Milei's administration.
• 💸 The government has implemented the largest spending cuts in 30 years, which has led to an increase in homelessness in Argentina.
• 📉 Milei's administration has seen a significant reduction in subsidies for public services like electricity, gas, water, and public transportation, impacting the average family's wallet.
• 🤝 Milei's campaign promises, such as dollarizing the economy and eliminating the peso, have not materialized, and the focus has shifted to strengthening the peso through public spending cuts.
• 💼 The government has reduced the number of ministries and cut spending on social security, public salaries, and education as part of its aggressive cost-cutting strategy.
• 📊 Argentina's public spending reached almost 38% of GDP in 2022, which is considered unsustainable for a developing country, and is a key factor in Milei's popularity at 52%.
• 🛑 The reduction of inflation is a central goal for Milei's administration, aiming to counter the long-standing resentment against the Peronist movement and its statist policies.
• 💡 The Argentine society continues to believe in Milei's message of sacrifice now for future gains, despite the economic hardships.
• 🌐 The government's intervention in the foreign exchange market to maintain the parallel exchange rate close to the official rate has concerned Wall Street investors.
• 🏦 Milei's administration is resisting accelerating the depreciation of the official exchange rate or eliminating capital controls to avoid further price increases, which goes against the orthodox policies of the IMF.

Q & A

What was the inflation rate in Argentina in December 2023?

The script does not provide the exact inflation rate for December 2023, but it mentions that it was the lowest level since the beginning of 2022 under Javier Milei's government.

What is the current inflation rate in Argentina as of July 2024 mentioned in the script?

The script states that the current inflation rate in July 2024 is still at 23%.

What criticisms has Javier Milei faced during his presidency?

Javier Milei has faced criticisms over the increase in unemployment, the decline in consumption, the reduction in pensions and public sector wages, and the suspension of almost all public works projects.

How has the Argentine peso performed under Milei's administration?

The Argentine peso has devalued by more than 50% during Milei's administration.

What unexpected event happened during Milei's presidency despite the economic challenges?

Despite the economic challenges, Milei remains as popular as when he was elected, with people still having confidence in his economic recovery plan.

What was one of the promises made by Milei during his electoral campaign that did not materialize?

One promise that did not materialize was Milei's statement as a candidate that he had the dollars to fund the dollarization of the Argentine economy, eliminating the peso and the Central Bank.

What measures did Milei take to reduce public spending?

Milei eliminated subsidies for public services such as electricity, gas, water, and public transport, reduced the number of government ministries by half, and cut spending on social security, public salaries, and education.

What was the impact of Milei's austerity measures on the average family in Buenos Aires in December 2023?

An average family in the metropolitan area of Buenos Aires would pay about 30,000 pesos for public services, which increased significantly in the following months.

What is the central idea of public spending cuts in Milei's government?

The central idea is that no underdeveloped country has ever become developed with public spending exceeding 30% of GDP. Argentina reached almost 38% in 2022, and Milei aimed to reduce it.

What is the current approval rating of Milei according to the script?

Milei's current approval rating is at 52%, which is one percentage point higher than in February, according to Management and Fit consultancy.

What is the main goal of Milei's administration in terms of economic policy?

The main goal of Milei's administration is to reduce inflation, which is a key part of his support base and a reaction against the Peronist movement that has led Argentina for years.

How has Milei's government responded to the devaluation of the peso?

Milei's government has resisted accelerating the depreciation of the official exchange rate or eliminating capital controls for fear of further increasing prices. They have intervened in the foreign exchange market, consuming accumulated international reserves to keep the parallel exchange rate close to the official one.

What challenges does Milei face in relation to the IMF loan mentioned in the script?

Milei faces the challenge of convincing the IMF, the country's largest creditor, that Argentina deserves a new chance, as the government's intervention in the financial sector goes against the orthodox policies of the organization.

What will the mid-term elections in 2025 reveal about Milei's presidency?

The mid-term elections in 2025 will show whether the measures taken by Milei and the difficulties they represented were worth it for those who supported his presidency.