( Spanish) –– Argentine President Javier Milei presented the 2025 budget in a speech delivered to Congress on Sunday, which must now discuss and, if necessary, approve it.
In an unusual event, since this presentation is usually made by the Minister of Economy in front of the Budget Committee of the Chamber of Deputies and with the possibility of the legislators asking questions, Milei left some definitions of what is expected for the Argentine economy in the next year.
The president stressed the importance of the surplus and warned that he would veto laws that go against his fiscal strategy.
“The cornerstone of this budget is the first truth of a healthy public administration, a truth that has been neglected for many years in Argentina: zero deficit,” he said.
“This budget project that we are presenting here today has a methodology that guarantees fiscal balance regardless of the economic scenario. This means that, regardless of what happens with the economy at the macro level, the fiscal result of the national public sector will be balanced,” he added.
“Politicians know perfectly well that when they increase public spending, they are putting money in one pocket of the people in order to take double the amount from the other. That is why we vetoed the project to increase public spending approved by this Congress and that is why we will veto all projects that threaten fiscal balance,” he added.
The Ministry of Economy released the most important projections for 2025: inflation of 18%, a dollar at 1,207 pesos and a 5% increase in the Gross Domestic Product (GDP).
In addition, the document shows that for the remainder of 2024 the Government expects a GDP drop of 3.8%, the dollar at 1,019.90 pesos and the consumer price index (CPI) to close with an increase of 104.4%. Inflation has risen by 94.8% this year until August. That is to say, inflation is projected to be below the latest measurements in the next four months – which were 4.2% in August and 4% in Julyone of the lowest in recent times.
Milei reiterated her criticism of the social spending of previous Kirchnerist administrations, and highlighted her position on what the Government should focus on.
“He left us with a system in which 70% of public spending goes to social spending of various kinds. This, which for years has been hailed as a success for the entire political spectrum, indicates nothing other than a humanitarian tragedy, because it means that more than 20 million Argentines cannot support themselves without the help of the State; help that is funded by stealing from a part of society with taxes,” he said.
“The fundamental thing that a national state has to do is to ensure macroeconomic stability, foreign relations and the rule of law. Period. Any other issue can be resolved through the market or is the responsibility of subnational governments,” he added.
Milei aims to increase the budget for Defense and Security – next year some US$ 6.2 billion (6 trillion pesos, at the official exchange rate) would be allocated to these areas, or 5.1% of the total.
The president said that provincial governments and Congress must also contribute to this task.
“I say to the governors: fulfilling the commitment to reduce consolidated public spending to 25 points of GDP requires that the provinces as a whole make an additional adjustment of US$ 60 billion. We have already fulfilled our part of the agreement. Now it is up to you,” he said.
“The current political situation in the country offers members of Congress two options: either we do exactly the opposite of what we have been doing for more than 100 years and stop sinking, or we continue doing the same, leave everything as it is and maintain this rotten system that impoverishes Argentines every day,” he said.
Last week, he managed political support in the Chamber of Deputies to maintain the veto on the increase in pensions for retirees. Also last week the increase in the university budget was approved, which – as already announced – will face the same fate.
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