On June 12, 2024, a wave of unrest swept through Buenos Aires as demonstrators clashed with riot police near the National Congress. The country’s economy, already struggling due to austerity measures, contracted by 5.1 percent in the first quarter, according to the national statistics agency.
President Javier Milei, who took office in December, had halted all new public works projects as part of his effort to reduce spending. This led to a decline in the construction sector and contraction in manufacturing. However, exports showed growth with an increase of 26.1 percent year on year.
Milei’s measures have been focused on cutting government spending and reining in inflation, which reached 4.2 percent in May, its lowest level in two and a half years. Despite this progress, analysts warn that these gains may not be sustainable as many citizens are struggling to make ends meet. The unemployment rate has also risen with 7.7 percent of the working population unemployed, an increase of 0.8 percentage points from the previous year.
Despite Milei’s efforts, the International Monetary Fund predicts that Argentina’s economy will contract by 2.8 percent this year following a decline of 1.6 percent in 2023. Milei has called his administration’s fiscal adjustments the largest in Argentine history and worldwide.
The clashes between demonstrators and riot police near the National Congress were just one example of growing unrest within Argentina as citizens struggle to cope with economic hardships brought on by austerity measures and political instability.
Milei’s focus on reducing government spending has had both positive and negative effects on Argentina’s economy. While it has helped to lower inflation and boost exports, it has also led to a decline in construction and manufacturing industries and rising unemployment rates.
Analysts are concerned that while Milei’s policies may bring short-term benefits, they may not be sustainable if they continue to exacerbate economic hardships for many citizens.
As Milei continues his visit to Czech Republic he remains optimistic about his administration’s fiscal adjustments being successful but acknowledges that there is still much work to be done before Argentina can fully recover from its economic challenges.
