Argentina’s GDP fell by 1.8% in 2024, less than the expected 3.6% decline, under President Milei’s leadership. After three quarters of recession, the economy saw a 5.5% growth in December. Significant austerity measures and a 27% cut in state spending have marked his first year in office, contributing to the lowest inflation in 4.5 years. The IMF anticipates further economic growth in the coming years.
In 2024, Argentina’s gross domestic product (GDP) decreased by 1.8 percent, an outcome that was less severe than the anticipated 3.6 percent contraction projected by the World Bank. This reduction occurred in President Javier Milei’s inaugural year in office.
Following a deep recession in the early part of the year, Argentina’s economy rebounded with an impressive 5.5 percent increase year-on-year in December, as reported by the national statistics bureau INDEC.
Milei attributed the positive figures to what he termed “the largest fiscal adjustment in history,” and these GDP results are one of several encouraging economic indicators since he took office. This fiscal overhaul involved significant cuts to state spending, totaling 27 percent in 2024.
As part of his aggressive austerity measures, Milei suspended public works, laid off thousands of civil servants, eliminated various state agencies, and reduced financial support for provincial governments. These initiatives are designed to shrink the government and stimulate Argentina’s struggling economy.
In January, inflation—historically a significant concern for Argentinians—dropped to 2.2 percent, marking its lowest point in over four years. Notably, US business magnate Elon Musk has expressed admiration for Milei’s strategies, including receiving a symbolic chainsaw during the Conservative Political Action Conference.
The International Monetary Fund has optimistic forecasts, predicting the Argentine economy will grow by five percent annually in 2025 and 2026.
Argentina’s GDP contraction in 2024 was less than expected, marking a significant point in President Milei’s economic adjustments. His austerity measures and the subsequent inflation reduction could signal a possible turnaround for Argentina’s economy, with optimistic growth projections for the next few years from the IMF. Elected on a promise of fiscal discipline, Milei’s actions reflect a radical approach aimed at revitalizing the economy.
Original Source: www.batimes.com.ar
