Javier Milei Declares End of Recession and Promises Major Tax Cuts
In a significant announcement, Argentine President Javier Milei declared the end of the recession during a national broadcast on December 10, 2024, marking the first anniversary of his presidency. He stated, "Today I can tell you that we have overcome the test of fire. We have emerged from the desert: the recession is over and the country has finally begun to grow." Milei attributed this turnaround to the macroeconomic adjustments implemented in 2024, which he claimed resulted in savings equivalent to 15% of the gross domestic product (GDP). He emphasized that while the worst may be behind, challenges remain, and he is committed to further reforms.
Milei's administration has focused on controlling inflation, which he noted has been a significant issue, with rates hovering around 120%. He promised a comprehensive tax reform for 2025, aiming to eliminate 90% of federal taxes, thereby returning tax autonomy to provinces. This ambitious plan is part of his broader strategy to create a smaller, more efficient state and to stimulate economic growth through deregulation and increased productivity. He stated, "We still have to eliminate many geological layers of the State," indicating a continued push for austerity measures.
Political Landscape and Future Outlook
As Milei prepares for the upcoming election year, he framed the legislative elections as a pivotal moment for Argentina, stating, "The choice will be one of ideas, between the stale politicians of the past and us." He warned political opponents against obstructing his reform agenda, asserting that citizens will not tolerate delays in progress. Milei's rhetoric against unions, journalists, and opposition leaders reflects his commitment to a radical shift in Argentina's political landscape.
In his address, Milei also highlighted the importance of free competition among currencies, while maintaining that taxes would still be paid in pesos. He reiterated his administration's focus on security, economy, and human capital, drawing parallels to past economic reforms under former President Carlos Menem. The president's remarks were met with mixed reactions, as he celebrated his administration's achievements while acknowledging the ongoing challenges that lie ahead.
