We have updated our Privacy Policy and Terms of Use for Eurasia Group and its affiliates, including GZERO Media, to clarify the types of data we collect, how we collect it, how we use data and with whom we share data. By using our website you consent to our Terms and Conditions and Privacy Policy, including the transfer of your personal data to the United States from your country of residence, and our use of cookies described in our Cookie Policy.
FILE PHOTO: Argentina's President Javier Milei addresses supporters from the Casa Rosada balcony, as his sister Karina Milei and his partner Fatima Florez look on, after his swearing-in ceremony, in Buenos Aires, Argentina December 10, 2023.
At his Sunday inauguration, President Javier Milei warned Argentines to prepare for a “painful economic shock,” but just how he intends to pull Argentina out of its economic crisis remains unclear.
The 53-year-old, self-styled “anarcho-capitalist” says radical change, including massive government spending cuts, is the only way to get Argentina back on track. Milei has already issued an emergency decree consolidating the government's 18 ministries into just nine and promised a government spending cut equal to 5% of GDP. During his inauguration address, Milei avoided more specific promises but said his new economy minister would roll out the first round of planned changes to Congress on Tuesday.
Many in Argentina’s business community were cautiously optimistic after Milei won the runoff in November, particularly once he tapped ex-central banker Luis Caputo as economy minister. But now the uncertainty is spooking markets, with shares in the state-owned oil company YPF and major banks sliding. Argentina has net negative foreign reserves and faces a $4 billion payment to the IMF and other creditors by the end of January.
How Milei will accomplish his more ambitious campaign promises, like dismantling the central bank and dollarizing the economy to replace the virtually worthless peso, is still uncertain. Even less controversial measures, like stopping the printing of pesos or simplifying the country’s byzantine system of foreign exchange rates, will require legislative support. But his party has only a small minority in Congress, and even his alliance with the center-right party of former President Mauricio Macri won’t net him the votes he needs.
The Guardian asked some of Argentina’s most prominent astrologers what the stars portend. Spoiler alert: They are not optimistic.