Argentine President Javier Miley said in a speech after taking the oath of office for the 2023-2027 term that “today begins a new era” in the South American country.
From a platform set up at the foot of the National Congress, in the presence of the main international representatives present at his presidential inauguration, and in front of tens of thousands of citizens, the economist added that this Sunday “the end of a long and sad story.” a story of decline and decline.”
Miley analyzed the entire legacy left by the Peronist government of Alberto Fernandez (2019-2023) to paint a stark picture of the country’s situation and the one in which it will have to make difficult economic decisions, and in this sense compared the consequences of the collapse of the economy. The Berlin Wall to the results of the latest elections in Argentina.
“Like the fall of the Berlin Wall, this election was a turning point in our history,” said Argentina’s new president.
He announced that fiscal adjustment and an end to money creation were part of his economic plan.
Miley also assured that stagflation “will be the last straw” for Argentina’s “recovery.”
“Unfortunately, I have to repeat: there is no money. The conclusion is: there is no alternative to adjustment, just as there is no alternative to shock,” Miley said after taking office.
The President acknowledged that the shock plan he would implement would have a negative impact on activity levels, employment, real wages, and poverty and misery rates.
“It is true that there will be stagflation, but it is not much different from what has happened in the last two years,” he said.
Miley stated that the “legacy” left by “Kirchnerism” is the worst ever received by the Argentine government, with financial and budget deficits equivalent to 17% of GDP, inflation that is growing at a rate of 300% per year, economic activity paralyzed, level poverty is 45% and the poverty rate is close to 10%.
He confirmed that he would apply a fiscal adjustment of 5% of GDP, which he promised would fall “almost entirely” on the state rather than the private sector.
He also confirmed that he would “clean up” the central bank’s liabilities and stop money creation, which he insisted was the cause of Argentina’s high inflation.
But he said monetary policy operates with a lag of 18 to 24 months, so he expects inflation to remain high, citing forecasts from private companies that forecast monthly rates of 20 to 40% between December this year and February next year.
Miley spoke of a delicate fiscal and monetary scenario that he estimates puts Argentina on the brink of hyperinflation that could reach 15,000% a year.
“Our top priority is to make every effort to avoid this catastrophe, which will result in the poverty rate exceeding 90% and poverty exceeding 50%,” he insisted.
Miley also warned of a “legacy” in terms of debt: “The bomb in terms of debt is $100 billion (about 92.8 billion euros), to which would have to be added approximately $420 billion (about 390 billion euros) of existing debt,” – he warned.
Added to this are the 2024 maturities of peso-denominated sovereign debt equivalent to approximately $90 billion (approx. €83.5 billion), as well as maturities with multilateral institutions amounting to $25 billion (approx. €23.2 billion). Euro). Euro).
Javier Miley said that “in every area, everywhere you look, the situation in Argentina is extreme” and the economy is “deplorable.”
“The situation in Argentina is critical and extraordinary,” Miley said from a podium set up at the foot of the National Congress, in the presence of key international representatives attending his presidential inauguration and in front of tens of thousands of people. citizens.
The new president said that in terms of security, “Argentina has become a bloodbath” and that one of the country’s most important cities – meaning Rosario – has been “kidnapped” by drug trafficking and violence, whose citizens have been “abandoned.” “the political class and that only 3% of crimes are convicted.
The podium, reminiscent of the inauguration ceremonies of North American presidents, even to the point where Miley himself spoke of “inauguration” – the term used in this country – was also attended by key international guests.
Sitting at the lectern were King Felipe VI of Spain, who arrived on Saturday, the presidents of Chile, Gabriel Boric from Uruguay, Luis Lacalle Pou from Paraguay, Santiago Pena from Ukraine, Vladimir Zelensky and Prime Minister of Hungary Viktor Orban. , among the others.
Miley spoke for a few minutes with the Ukrainian leader before they hugged to thank him for the trip to Argentina.
Guests also included former presidents of Argentina Mauricio Macri (2015-2019) and Brazil Jair Bolsonaro (2019-2023).