Argentina sees first monthly budget surplus in 12 years

Argentina’s government recorded its first monthly budget surplus in nearly 12 years in January, as new President Javier Milei continues to push for strong spending cuts, the Economy Ministry said in a statement.

January was the first full month in office for Milei, who took office in December. It ended with a positive balance for public-sector finances of US$589 million at the official exchange rate, the government said late Friday.

The figure includes payment of interest on the public debt.

It is "the first [monthly] financial surplus since August 2012, and the first surplus for a January since 2011," the Economy Ministry said, according to the official Telam news agency.

Milei has been negotiating with the International Monetary Fund over Argentina’s US$44-billion loan and has vowed to achieve balance in public finances this year. 

"The zero deficit is not negotiable," Economy Minister Luis Caputo said Friday on X, the former Twitter. 

Milei, an economist, has advocated sharp cuts in spending and a reduction of public debt on the way to a dollarisation of the economy.

Following a 50 percent devaluation of the peso, a lifting of price controls and strong rate increases, Argentina saw an inflation rate for January of 20.6 percent, with a 12-month rate of 254.2 percent. 

The year 2023, the final year of former president Alberto Fernandez’s government, ended with a 211 percent inflation rate. 

With poverty affecting 45 percent of the population (or closer to 60 percent, according to a recent private study), Milei has predicted an economic rebound within three months. 

– TIMES/AFP