Javier Milei was elected President of Argentina and stated on Monday that it could take 18 to 24 months to bring Argentina’s inflation under control. The 53-year-old outsider won a landslide victory in Sunday’s presidential election, beating the economy minister Sergio Massa by 12 percentage points. Milei pledged to end decades of unbridled government spending and “stop Argentina’s decline.” He promised that he would “get the public accounts in order very quickly” and plans to tackle annual inflation that has reached 140 percent and a poverty rate of 40 percent.
During the campaign, Milei promised to replace the weakened peso with the US dollar and get rid of the central bank, which he accuses of fueling inflation by printing money to finance excessive government spending. Miley plans to resolve the debt issued by the Central Bank and “everything that can be in the hands of the private sector will be in the hands of the private sector,” including state oil company YPF and state media. He also plans to push for an end to strict currency controls, and analysts say the official peso-to-dollar exchange rate is an expensive fiction. Milei will take office on December 10, inheriting a country whose coffers are in the red, with $44 billion in debt to the International Monetary Fund looming over his new government.
IMF Director Kristalina Georgieva congratulated Milei and said she looked forward to working with him “to develop and implement a strong plan to preserve macroeconomic stability and boost inclusive growth for all Argentines.” Monday is a national holiday, meaning the impact of Miley’s victory on the volatile peso is delayed. Argentina has tightly controlled the peso’s exchange rate and access to dollars in recent years, which has led to the flourishing of the black market of greenbacks. This so-called “blue dollar” exchange is almost three times the value of the official exchange rate, and analysts warn that the peso is ripe for a sudden devaluation.
After Miley’s victory, Brazilian President Luiz Inacio Lula da Silva wished “happiness and success” to the new Argentine government. China said it will continue cooperation with Argentina, congratulating the newly elected president on his victory. “China has always attached great importance to the development of Sino-Argentine relations from a strategic and long-term perspective,” said Foreign Ministry spokeswoman Mao Ning at the regular briefing.