Argentina’s Inflation Keeps Falling Amid Milei’s Surpluses

Argentina recently announced its fourth consecutive month of budget surpluses in the wake of President Javier Milei’s tough austerity measures. This also continues to result in a sharp slowdown in inflation.

The public sector managed to record a surplus of ARS 1.1 trillion (roughly USD 1.3 billion) in the first quarter of 2024, the first time that has occurred since 2008. Remarkably, interest expenses went down from ARS 1.5 trillion in January to ARS 200 billion in March.

Reduced public spending contributed to a decelerating monthly inflation rate. Consumer price growth slowed from 25% month-on-month in December 2023 to a 20% pace in January and then "only" 8% by the end of April. Annualized price increases, however, have yet to see a slowdown; the April year-on-year rate was 290% – the worst inflation in the world.

The libertarian-leaning president has been cutting the public-sector workforce, removing subsidies for transport and fuel, and slashing transfers from the national government to the provinces.

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