Title: Javier Milei’s Austerity Measures: Impact on Argentina’s Mid-Term Elections
As Argentina approaches the critical mid-term elections in October, President Javier Milei’s libertarian party is projected to perform well despite his controversial austerity measures. Milei has recently vetoed legislation aimed at increasing pensions and disability benefits, amidst widespread protests against his fiscal policies that are significantly affecting the daily lives of many citizens.
On Monday, just months before these pivotal elections, Milei’s administration announced that the country lacks the financial resources to support the proposed spending increases. Although Congress passed these laws in July, they can still be overturned with a two-thirds majority vote. Milei’s party, which holds a limited number of parliamentary seats, is banking on a repeat of last year’s success, when he managed to halt pension increases with backing from the conservative PRO bloc.
In a statement released on X, the president’s office criticized the approval of the now-vetoed laws, labeling the process as "irresponsible" and failing to identify viable funding sources. They estimated that the proposed spending hikes would have represented 0.9% of the country’s gross domestic product (GDP) this year and 1.68% by 2026. "This president chooses to express uncomfortable truths rather than comfortable lies," the statement asserted. "The only path to making Argentina great again is through hard work and integrity, not the same old strategies," a sentiment reminiscent of former U.S. President Donald Trump’s "Make America Great Again" slogan.
Since taking office in December 2023, Milei, who identifies as an "anarcho-capitalist," has implemented significant cuts to federal spending in a bid to combat inflation. His administration has eliminated tens of thousands of civil service positions and slashed social spending and public works. As a result of these sweeping economic reforms, Argentina achieved its first annual surplus in 14 years and, in June, the monthly inflation rate dipped below 2% for the first time since 2020.
However, these austerity measures have also been linked to a rise in poverty, affecting millions of Argentines in the first half of last year. Unemployment has increased, and prices have surged by 40% year-on-year, prompting widespread protests. Pensioners, in particular, have been among the hardest hit and have led weekly demonstrations against the government’s policies.
Despite the ongoing public dissent, recent polls indicate that Milei’s party maintains a significant lead as the October mid-term elections approach. These elections will serve as a critical referendum on Milei’s administration and the impact of his policies over the past two years.
