Argentina: Javier Milei Warns of Economic Shock in Inaugural Address

Facts

• After being sworn in as Argentina’s president on Sunday, Javier Milei delivered his inaugural address, warning the country about the economic shock that his administration will deliver. The libertarian economist said that "there is no money" and "there is no alternative to austerity." ¹
• Thousands of Milei's supporters gathered in the capital city of Buenos Aires to celebrate the inauguration. Addressing the nation, Milei reiterated his policy to address Argentina's dire economic concerns and continued to speak bluntly about the issues he spoke about often during his campaign. ²
• A once wealthy country, Argentina is dealing with 140% annual inflation and 40% poverty rate, which Milei attributes to years of government spending and socialist policies. ³
• Milei has promised to significantly reduce government spending, eliminate the Central Bank, and replace the Argentine peso with the US dollar. He said that the country's $45B debt to the International Monetary Fund and $43B trade deficit prevent a gradual approach to fixing the economy and that his policies will cause some economic pain in the short term.⁴
• Argentina's stock market and currency fell on Monday following Milei’s economic warning. The country's peso officially trades at 366 to $1 USD, but the country's parallel black market reflects a more accurate figure of 945 pesos to $1 USD. Milei’s government will lay out further economic plans on Tuesday.⁵
• Milei’s election toppled a long-standing run of dominance by the Peronist movement. Despite Milei’s victory, he is still expected to face opposition from Peronist lawmakers who refuse to accept reduced wages.⁶

Sources: ¹BBC News, ²Associated Press, ³Al Jazeera, ⁴NBC, ⁵MSN, and ⁶NPR Online News.

Narratives

• Right narrative, as provided by PJ Media. Argentina made the correct choice in picking Javier Milei as the leader to lift the country out of its economic disaster; however, the road to economic prosperity is long and arduous. There is no quick fix to Argentina’s triple-digit inflation and rising poverty, and harsh measures are needed to undo decades of damage done by socialist leaders. While sound, free-market economic measures are needed to save Argentina, the situation is so dire that it will take time for these policies to yield positive results. Socialism plagued Argentina, and the country must accept the medicine it needs to get better, even if it results in short-term pain.
• Left narrative, as provided by Foreign Policy. Javier Milei is another Trump-style authoritarian who is working to destroy his country’s democracy. Milei capitalized on Argentina’s severe economic troubles to push a platform of hate and extremism. The self-described libertarian is actually a fascist who wants to use his power to undo the progress Argentina has made on human rights and democratic issues. Milei’s extreme economic policies may not even be implemented and could exacerbate economic hardship if they are. Milei has already promised austerity measures — his autocratic impulses are deeply concerning.
• Nerd narrative, as provided by Metaculus. There is a 24% chance, that Argentina will fully dollarize its economy before 2028, according to the Metaculus prediction community.