Javier Milei took office as Argentina's president on December 10, 2023, and told supporters gathered outside Congress that an economic shock was unavoidable. His blunt explanation, 'There is no money,' made the inaugural address less a celebration than a warning: conditions would worsen before his government expected them to improve. For a country already struggling with soaring prices, scarce dollars and a large public debt burden, the question was whether a president elected to break with the political establishment could deliver adjustment without losing the public's consent.
A diagnosis from the steps of Congress
Milei succeeded Alberto Fernández after winning a November runoff against the governing Peronist coalition's candidate. The new president blamed his predecessors for putting the economy on a path toward hyperinflation. He described a fiscal adjustment equivalent to five percentage points of gross domestic product and said the costs would fall on the state rather than the private sector. Those were his claims and intentions, not a guarantee about who would ultimately pay. Households would soon judge the plan by wages, prices and public services, not the wording of the speech.
The starting position was difficult. Reuters reported at the inauguration that annual inflation was 143% and rising, that Argentina's net foreign-currency reserves were estimated to be about $10 billion below zero, and that capital controls had distorted the exchange rate. A severe drought earlier in 2023 had damaged soy and corn crops, reducing a vital source of export dollars. Argentina also needed to revive its $44 billion programme with the International Monetary Fund. The financial constraints helped explain the new administration's urgency, but did not establish that any particular mix of spending cuts and deregulation would succeed.
A radical mandate, a narrow route through Congress
The former television economist had campaigned on shrinking the state, dollarising the economy and closing the central bank. Yet Reuters noted that dollarisation did not feature in his inaugural speeches. He had chosen Luis Caputo, a more conventional financial policymaker, as economy minister, and Santiago Bausili to head the central bank. The difference between campaign pledges and the opening-day cabinet mattered: Milei needed immediate financial management as well as a programme of structural change.
On his first day, Milei said he had signed a decree reducing the number of ministries from 18 to nine. That visible cut signalled the direction of government, though it could not by itself solve the underlying fiscal and currency problems. His party had only a small congressional bloc, making support from other parties essential for legislation. The political challenge was therefore not just to announce a leaner state but to secure votes for the changes that needed parliamentary approval.
The costs come first
Milei warned that the near-term situation would deteriorate. Supporters interviewed by Reuters saw his victory as a last chance after years of boom-and-bust policy; others worried about further hardship in a country where poverty already affected more than two-fifths of the population. That division would shape every subsequent decision about subsidies, public works and labour rules. The administration's credibility rested on whether immediate losses could be connected to a plausible and durable reduction in inflation.
There were international signals too. Ukrainian President Volodymyr Zelenskiy attended the ceremony, as did Chile's Gabriel Boric and Uruguay's Luis Lacalle Pou; Brazil's Luiz Inácio Lula da Silva was among the notable absences, Reuters reported. Argentina's trade with Brazil and China and its IMF relationship meant that campaign rhetoric would have to coexist with practical diplomacy. As Milei left the congressional steps, the promised shock was still largely a plan. Caputo's first economic measures would show how fast, and on whose terms, the government intended to act.
