Milei launches “zero deficit” budget bill for 2025

Milei launches “zero deficit” budget bill for 2025

Argentine President Javier Milei appeared before Congress Sunday to submit the 2025 budget bill foreseeing an exchange rate of AR$ 1,207 against the US dollar and annual inflation reaching 18.3% after a projected Gross Domestic Product (GDP) growth.

 Argentina ranked at the bottom of the Americas this year when it came down to GDP and it was also the only country besides Haiti to show negative figures, according to most international analysts. The Libertarian Government also envisioned a 0.2% reduction in public expenditures for next year, when the GDP is expected to grow 5%, just as in 2026 followed by a 5.5% progress in 2027 driven by industry and commerce, with increases of 6.2% and 6.7%, respectively.

The official US dollar quotation is expected to stand at AR$ 1207 in December 2025, an 18.3% rise from the AR$ 1019.9 projected for 2024.

According to the government’s draft budget, the Consumer Price Index (CPI) will grow 104.4% over the year 2024, some 20 percentage points below the Central Bank’s (BCRA) Market Expectations Outlook (Report Relevamiento de Expectativas del Mercado – REM) expectations. However, if these figures are to be achieved, inflation needs not to exceed 4.97% in the remaining 4 months of the year when it has been growing at an average pace of 4% each month.

Milei insisted before a half-full Parliament that he would be pursuing a “zero deficit” policy and therefore pledged to veto any bill altering the fiscal balance “because we will not be accomplices of swindling the Argentine people to adopt a populist measure.”

“We will only discuss the increase of an expense when it comes with an explanation of what item to reduce to cover it,” he added.

Milei, a graduate economist, made Sunday’s presentation before Congress, although it is usually the Economy Minister who is entrusted with this task. “This fiscal shield opens a new chapter for our country. We came to put a clamp on the State. I decided to present it myself for two reasons: [First] Because I am an economist, and, second, because I am proposing a diametrically different budget project,” the president explained.

“We are going to change the methodology through which the budget is prepared,” he added. “There is nothing more impoverishing for the common Argentines than the fiscal deficit. And there is nothing that benefits politicians more,” he also noted as former entertainer Amalia “Yuyito” González -Milei’s latest romantic partner- watched him from the terraces.