On Sunday, December 10, the new president, Javier Milei, will be sworn in in Argentina. He faces a difficult challenge because the country is in a deep crisis, both economic and social. Outgoing president Alberto Fernandez apologized for the situation in the country on Saturday, and in a farewell video he expressed “deep pain for the situation, for those compatriots who still live in the deepest poverty and whose fate I have not been able to improve.”
On Saturday, on the eve of the inauguration of the new president of Argentina, “consistent libertarian” Javier Milei, the outgoing head of a country plunged into a deep economic and social crisis, Peronist Alberto Fernandez, published a farewell speech on video.
– I express my deep pain for the situation of those compatriots who still live in the deepest poverty and whose fate I have not been able to improve – he said in his farewell to his compatriots.
64-year-old leftist politician Alberto Fernandez recalls in the recording that his government also achieved some successes in social policy. One of the few was reducing unemployment to 6.2%.
Alberto Fernandez resigned from running for re-election due to the deep crisis that Argentina found itself in during his presidency. The country is experiencing 142 percent annual inflation, the outlook for next year is even worse, and four out of every ten Argentines suffer from poverty or misery.
Argentina’s gigantic inflation is a challenge for the new president
President Javier Millei takes over the leadership of Argentina with an economy in dire straits and $44 billion in debt to the International Monetary Fund. His Libertad Avanza party is only the third political force in Congress, which will make it much more difficult for him to conduct effective politics.
While the official exchange rate of the American currency is 380 pesos, the dollar exchange rate on the free market is around 950 pesos, and a few weeks ago it increased to 1,100 pesos due to market turmoil.
“Milei achieved electoral success as a politician who promised to overcome Argentine inflation, the highest in this part of the world, and to raise the level of citizens’ income. To achieve this, he must first of all control the double-digit monthly inflation,” writes El Cronista in Friday’s issue “, an influential Argentinian website.
In October, annual inflation in Argentina amounted to 142.7 percent, and calculated from January this year – 120 percent. According to forecasts by Argentine banks, it will reach 200 percent at the end of the year, and Moody’s forecasts indicate that in 2024 it may reach up to 350 percent in Argentina.
Milei himself realistically predicts that the first two years of his presidency will be marked by “superinflation”.
Artificially suppressed prices will result in an ‘inflation explosion’
On the eve of his becoming president, the program of the outgoing Peronist government called “fair prices” is still being implemented in Argentina, which involves the artificial suppression of inflation by the state: “El Cronista” calls it “suppressed inflation that will explode in the near future.”
Petrol and gas are still sold at prices 10 percent lower. lower than the market prices, which – as “El Cronista” predicts – “will soon explode”.
According to the daily, the situation is similar with some taxes and prices: until October, Argentines paid for electricity with a discount of at least 67%. Thanks to such operations, many prices were “suppressed” – as at the beginning of November – by an average of 43%.
After Javier Milei takes over as president – according to comments from most of the Argentine media – the success of his government will largely depend on the results of negotiations with the International Monetary Fund on the repayment of Argentine debt.
IMF data shows that Argentine government financial subsidies are partly responsible for the rise in public debt, which exceeded $400 billion in the second quarter, reaching historic highs.
Main photo source: PAP/EPA/Juan Ignacio Roncoroni