Argentina Slashes Subsidies And Devalues Peso By 50% As Milei's Austerity Plan Takes Shape

The administration of newly-inaugurated Argentine President Javier Milei introduced its first set of austerity measures this week, as South America's second largest economy attempts to pull itself out of an ongoing financial crisis defined by persistent inflation and a scarcity of foreign currency.

The new government will reportedly cut public spending equal to 2.9% of GDP. Energy subsidy reductions will account for the largest share of spending cuts (0.5%), followed by social security and pensions (0.4%) and transport subsidies (0.2%).

Government spending in Argentina has been between 35% and 42% of GDP since 2018, and has been identified by some experts as a primary driver for the country's current economic crisis.