The Blubber

Argentine President Javier Milei plans to fire 70,000 government workers in the coming months as part of his strategy to reach a fiscal balance at any cost this year, per Bloomberg.

Aside from the job cuts, Milei proudly announced on Tuesday at an event that he has halted public works, reduced some funding to provincial governments, and terminated over 200,000 social welfare plans, which he criticized as corrupt. These actions are part of his strategy to achieve fiscal balance at any cost this year.

"There's a lot of blending," Milei remarked in a lengthy speech at the IEFA Latam Forum in Buenos Aires, referring to the erosion of wages and pensions due to 276% annual inflation. "There's a lot more chainsaw."

While only a small fraction of Argentina's 3.5 million public sector workers, Milei's job cuts are likely to face resistance from the country's influential labor unions and could threaten his high approval ratings. One union representing some government workers went on strike on Tuesday, and a government report revealed that private sector workers experienced the most significant one-month wage decline in at least three decades after he took office in December.

The leader of the state workers union ATE quickly responded on X, announcing a national strike without providing further details.

Milei pointed to polls indicating that Argentines are more optimistic about the economy's future, and a recent indicator of public confidence in the government has risen despite his austerity measures.

"People have hope; they're seeing the light at the end of the tunnel," Milei concluded.

Other highlights from Milei's speech on Tuesday:

• He stated that peso futures contracts are in line with the central bank's 2% monthly crawling peg scheme, dismissing calls for a sharp devaluation of the currency as "ridiculous."
• The Argentine central bank is on track to achieve net neutral reserves after starting with debt liabilities exceeding cash on hand by $11.5 billion in December.
• Milei pledged to intensify his efforts to reform the Argentine economy after the 2025 congressional elections, with over 3,000 reforms in progress.
• He described the Senate's rejection of his emergency decree as "marvelous" because it "exposed all the dirty fingers" of politicians he refers to as "delinquents."