President Javier Milei recently presented his 2025 budget to Congress, marking a significant moment in his administration as he seeks to eliminate the country’s chronic fiscal deficit. In a bold move, Milei personally addressed lawmakers, a departure from tradition where such presentations are typically made by the economy minister. He criticized Argentina’s history of macroeconomic mismanagement and emphasized his commitment to strict fiscal policies, stating that he would veto any legislation that undermines his goals.
The budget proposal comes after a tumultuous week in Congress, where Milei’s party holds less than 15% of the seats. Opposition parties have been pushing for increases in salaries and pensions to help citizens cope with the severe austerity measures currently in place. Despite this political tension, Milei reiterated that the cornerstone of his budget is the principle of a “zero deficit,” which he claims has been neglected for years.
Over the past nine months, Milei has implemented drastic cuts to public spending, claiming they are necessary to restore market confidence amid one of the world’s highest inflation rates. These measures have resulted in a fiscal surplus of 0.4% of GDP, a first in nearly two decades. However, this austerity has also led to increased poverty levels, with nearly 60% of Argentines now living below the poverty line.
Milei’s administration projects an optimistic outlook for the economy, expecting annual inflation to drop to 18% by the end of 2025 and aiming for a 5% growth rate. Yet, much depends on Congress’s approval of his budget, as recent legislative victories have been fleeting. The president has already vowed to veto any bills that threaten his fiscal discipline, including recent proposals to increase spending on public universities and intelligence services.
As tensions rise between Milei and opposition lawmakers, analysts warn that his confrontational approach may hinder effective governance. The coming weeks will be crucial as negotiations unfold and both sides grapple with the implications of austerity on an already struggling populace.
