‘Lower inflation, stronger growth’ on way, Milei tells investors

Milei argued his administration's economic achievements were “plain to see,” citing improvements on growth, inflation and Argentina’s country risk rating, which is tracked by JP Morgan. The latter, he claimed, has “fallen from 3,000 points to 500, and Argentina now showing fiscal indicators worthy of a far better rating.”

He then predicted, however, that the country will only achieve investment-grade status “on the day Argentines decide to embrace the ideas of freedom and finally bury the ideas of populism.”

On inflation, Milei admitted that the monthly rate – which hit 2.6 percent last month – is “not where we want it to be, but if we had not tackled the fiscal imbalance, the Central Bank imbalance [of reserves], and put the state’s finances in order, without any doubt we would have ended up with inflation of 15,000 percent.”

Argentina has not recorded an annual inflation rate of such height since the period of hyperinflation in the 1990s. Under Milei’s predecessor in office, ex-president Alberto Fernández, inflation topped 200 percent.

Eliminating price hikes “is a necessary condition for growth, though not a sufficient one,” he added. “Each passing week may bring a little zigzag in the indicators, but the trend is clear: Argentina is heading towards lower inflation and stronger growth.”

The President’s remarks echoed the speech given earlier in the day by Economy Minister Luis Caputo, who predicted that May’s inflation rate would be lower than April’s and asserted that, by 2027, Argentina would avoid the uncertainty usually generated by presidential elections because “the economy will overwhelm politics.”

Milei – who spoke with under-fire Cabinet Chief Manuel Adorni and his sister, Presidential Chief-of-Staff Karina Milei, seated in the front row – then went on to criticise media outlets for their “unfair … attacks” on his government. 

“They tried in the Chamber of Deputies, in Congress, with seven impeachment attempts. They attacked the economic programme with 40 laws aimed at undermining fiscal balance, even violating the law itself, which requires any legislation involving spending to include a source of funding.

 “Nothing like this has ever been seen in history,” he claimed. 

Despite the “media pressure” and the “false accusations,” Milei said his government had fulfilled the campaign promises he made ahead of the midterm elections.

“Between December and February, among other things, we achieved a zero deficit, lowered the age of criminal responsibility, introduced labour modernisation, signed the agreement with the European Union, and passed the fiscal innocence law,” he said.

Milei also took a moment during his speech to explain his alignment with the US government and what he considers to be US President Donald “Trump’s logic,” which is “to prevent all mineral and nuclear production from ending up in the hands of an opposing military power.”

“The world has changed. Political risks matter, and this creates a huge advantage for countries capable of producing energy, food, minerals and knowledge-based services – everything we possess. And if we fail to seize this opportunity, we will miss our last chance,” the President said.

Regarding Trump’s policies, Milei stated that the current situation is not one for “the faint-hearted,” adding that his government has “taken a clear international stance from the very beginning.”

“Argentina has already made its choice: to stop watching history pass before its eyes while others seize opportunities, as its own leaders continue trying to square the circle and insist on formulas responsible for repeated failures,” he said.

He concluded his speech by saying: “The train only passes once, and Argentina has already bought its ticket. The question is whether the region is willing to follow.”

Caputo’s comments

Earlier in the day, Caputo had predicted that May’s inflation rate would be a deceleration from the previous month.

“Inflation is falling once again. In April it was 2.6 percent, the lowest since November, and it is expected to be even lower in May,” the minister declared.

Caputo stressed that “expectations are anchored and, for the next 12 months, inflation is projected at 20 percent,” meaning that “no major shock is expected.” 

“There is no reason not to believe inflation will be 20 percent,” the minister insisted, going on to echo President Milei’s criticism of coverage of the economy in the media. 

“Do not let yourselves be psychologically manipulated by what the press says,” pleaded Caputo. “We are focusing on the data because it is the best way to combat the narrative. There is a huge divergence between the data and the narrative.” 

“Let us stop getting caught up in what we hear and focus on the figures,” the official urged, criticising ”a journalistic version [of truth] that bears no relation to reality.”

After outlining these points, he remarked: “It almost feels like a joke reading newspapers and seeing reports of a crisis. The EMAE [monthly economic activity estimator tracked by the INDEC national statistics bureau] is at a historic high. There could not be a greater divergence between what is being said and what is actually happening.”

Caputo insisted: “This is the reality; the other thing is polls and feelings, surveys of 2,000 people. Let us stop being psychologically manipulated by what is heard or seen.” 

“We have carried out a historic transformation, the direction is the right one. We must focus on the positive, and no-one denies there is still a long way to go,” he concluded.

– TIMES/NA/PERFIL