Javier Milei must tighten fiscal adjustment and asks his ministers for additional spending cuts

The Argentine government of Javier Milei is expected to tighten fiscal adjustment even further to register a surplus of 1.6% of GDP this year. Milei told the newspaper El Cronista that he has asked all ministries in his government to increase spending cuts.

"At the last cabinet meeting, I asked for an extra cut. All ministers agreed to make an identical adjustment in percentage terms. Economy Minister Luis Caputo will send the percentage of the adjustment in the next few days. The surplus is no longer just a matter for the Economy Ministry, but for all ministries," the president told the Argentine newspaper.

In agreement with the International Monetary Fund (IMF) , Milei had committed to a surplus of 1.3% of GDP. Now, the president talks about increasing this result.

In the first five months of this year, Argentina recorded a surplus of 0.8% of GDP. This performance is lower than that recorded in the same period in 2024. Hence the intention to deepen the reduction in spending.

Milei was elected in 2023 with a chainsaw as his campaign symbol. It represented the cuts he promised in public spending. The president kept his promise and, last year, after implementing cuts, managed to get the country to register a primary surplus of 1.8% of GDP. The previous year, Argentina had a deficit of 4.4% of GDP.

Also in the economic area, the president has managed to reduce inflation. It closed 2024 at 117.8%. The previous year, it had been 211.4%.

The results of Milei's economic policy have been praised by the IMF. "Despite the more challenging environment, Argentine authorities have continued to make notable progress," IMF spokeswoman Julie Kozack said last week.