In an address to the nation on April 22, Argentina's President Javier Milei announced the country's first quarterly budget surplus in over a decade, marking a significant moment in Argentina's economic history. President Milei, who assumed office in December 2023, conveyed to national TV that the South American nation registered a surplus of approximately 275 billion pesos (around S$400 million at the official rate) in the first quarter of 2024, equating to a surplus of 0.2 percent of gross domestic product.

“This is the first quarter with a financial surplus since 2008,” Milei stated, referencing the initial year of his predecessor Cristina Kirchner's term. Milei, who identifies as an anarcho-capitalist, attributed this financial outcome to his government's stringent fiscal policy, saying, “If the state does not spend more than it collects and does not issue (money), there is no inflation. This is not magic.”

The president's victory in the November 2023 elections was predicated on a promise to eliminate the budget deficit, a goal even more stringent than the conditions set by the International Monetary Fund (IMF) as part of Argentina's US$44 billion loan arrangement. In pursuit of this objective, Milei's administration has implemented a series of austerity measures which include significant cuts to subsidies for transport fuel and energy. This comes at a time when the nation is grappling with an annual inflation rate of 290 percent, poverty levels at 60 percent, and a considerable decline in the purchasing power of wage earners.

The austerity program has also led to job losses for thousands of public servants, with Milei cautioning, “Don’t expect a way out through public spending.”

Despite the economic milestone, the president's policies have sparked protests and concerns among various sectors of society. University students, supported by unions and opposition parties, have organized a march for April 23 to demonstrate against the cuts to higher public education, research, and science funding. The move follows a declaration of a budgetary emergency by universities after the 2024 budget was set at the same level as 2023's. University of Buenos Aires rector Ricardo Gelpi expressed the situation, saying, “At the rate at which they are funding us, we can only function between two and three more months.”

In a recent development, President Milei also announced Argentina's official request to join NATO as a global partner, a move that could potentially enhance political and security cooperation with Western countries and attract investment. The application's success hinges on the unanimous consent of all 32 NATO members.

As Argentina, the second-largest economy in South America, continues to battle high inflation with an annual rate of 143%, the president's administration has emphasized that contracts of employees hired before 2023 will be renewed, despite the recent dismissal of 5,000 government workers as part of the austerity measures.

President Milei remains optimistic about his government's economic strategy, asserting, "Our plan is working." He has pledged to steer the nation away from the "hell we inherited," even as he faces growing domestic resistance.

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