New Argentine president warns of ‘worse’ times ahead

Javier Milei has lamented that tough austerity measures will be needed to help tame inflation and tackle debt and currency crises

Javier Milei has marked his first speech as Argentina’s president by giving his supporters some sobering news, warning that the country’s economic crisis will get worse before a recovery can begin because his predecessors left behind a nation mired in hyperinflation and fiscal shambles.

“Today, it’s the start of a new era for Argentina,” Milei said on Sunday in his inaugural address in Buenos Aires. “Today we close a long and sad history of decadence and decline, and we take the road of reconstruction of our country.”

The self-described “anarcho-capitalist” warned that after a century of leftist rule, it won’t be easy to turn around Argentina’s wrecked economy. Austerity measures, including drastic cuts to government spending, will need to be employed immediately, which will result in even tougher economic conditions in the short term, he said.

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“The political class left the country at the brink of its deepest crisis in history,” Milei said. “We are not looking for, nor do we want, the tough decisions that will need to be made in the coming weeks, but regrettably, they didn’t leave us any option.” He added that “no government has received a worse inheritance than what we are receiving.”

Milei noted that the country had an annual inflation rate of 143%, a $43 billion trade deficit and a $45 billion debt to the International Monetary Fund. Like many of Argentina’s citizens, he said, the government is broke, and it has $10.6 billion in debt payments coming due in April. Four in ten Argentinians live in poverty, and the economy is sliding toward its sixth recession in a decade.

“There is no alternative to a shock adjustment,” Milei said, adding that the economy would worsen in the short term. “There is no money.”

The new president campaigned on pledges to fight corruption, eliminate the country’s central bank and replace Argentina’s volatile currency with the US dollar. He said voters had given him a mandate for “change that has no turning back.”

READ MORE: Can Milei’s ‘shock therapy’ fix Argentina’s economy?

Hungarian Prime Minister Viktor Orban and Ukrainian President Vladimir Zelensky were among the foreign leaders who attended Milei’s inauguration ceremony. Other VIP guests included the presidents of Armenia, Chile, Uruguay, Paraguay and Ecuador, as well as Spanish King Felipe VI, Israeli Foreign Minister Eli Cohen, and former Brazilian President Jair Bolsonaro.

US President Joe Biden did not attend the event, instead sending Energy Secretary Jennifer Granholm as the leader of Washington’s delegation. Other US officials who attended the inauguration included Ambassador to Argentina Marc Stanley and Juan Sebastian Gonzales, senior director for the Western Hemisphere on the White House National Security Council.

READ MORE: Eliminating central bank ‘non-negotiable’ – Argentina’s Milei