Argentina has 2nd monthly surplus after spending cuts, but suffers from poverty and inflation

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The primary fiscal surplus was 1.23 trillion pesos (US$1.45 billion) in February, according to the Argentine Economy Minister. The country, however, has the worst inflation in the world. Inauguration of President Javier Milei in Buenos Aires on December 10, 2023 Agustin Marcarian/REUTERS Argentina recorded a primary fiscal surplus of 1.23 trillion pesos ($1.45 billion) in February, the country’s Economy Minister reported , Luis Caputo, this Friday (15). This was the second consecutive month of surplus in the country after years of regular deficits. In an attempt to control high inflation, ultraliberal President Javier Milei implemented austerity measures, including painful cuts to state spending, reducing subsidies and pruning the public sector. Caputo, from Economy, added that the first two months of 2024 recorded a fiscal surplus of 3.24 trillion pesos, representing 0.5% of the gross domestic product (GDP). The fiscal-financial surplus — which includes net interest payments on public debt — was 338.1 billion pesos in the month and, cumulatively, 856.5 billion pesos in the first two months of the year. At the same time, the country suffers from poverty and very high inflation. (Read more below) The government recorded “two consecutive months of financial surplus for the first time since the beginning of 2011, accumulating a surplus after interest of almost 0.2% of GDP in the first two months of 2024”, the ministry reported in an announcement. The Milei government is targeting a “zero” financial fiscal deficit this year, part of the economic goals agreed with the International Monetary Fund, with which the country has a US$44 billion loan program underway. Argentine Senate rejects Milei’s package of measures Inflation and poverty Meanwhile, Argentina’s inflation rose 13.2% in February, reported the country’s National Institute of Statistics and Census (Indec) last Tuesday (12). As a result, price increases reached 276.2% in 12 months. Despite the increase, the number represents a slowdown compared to what was observed in January, when prices rose 20.6%. The new price index data also consolidates Argentina’s position as the country with the worst inflation in the world. The scenario has harmed purchasing power and increased poverty — which reaches 45% of the population, according to official data. A study, initially published by the newspaper Ámbito Financiero, projects even higher numbers: 57.4% of Argentines living below the poverty line, more than 26 million people. * With information from Reuters and France Presse

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