Milei says could take two years to tame Argentina’s high inflation

President-elect Javier Milei said Monday that it could take between 18 and 24 months to bring Argentina’s rampant inflation under control, as he outlined his plans to reform the economy.

Milei won a resounding victory in Sunday’s presidential election, trouncing Economy Minister Sergio Massa by 12 points with a pledge to end decades of unbridled state spending.

“First, we will start with the reform of the state, to very quickly put public accounts in order,” the libertarian economist told Radio Mitre.

In a series of morning radio interviews to lay out his vision, he said he had a “clear plan” to tackle annual inflation that has hit 140 percent and a poverty rate of 40 percent.

During the campaign, Milei vowed to ditch the ailing peso for the US dollar and get rid of the central bank, which he accuses of fueling inflation by printing money to finance government overspending.

“The empirical evidence for the Argentine case says that if you cut monetary emission today, it takes between 18 and 24 months to destroy (inflation),” he said.

On his plans to reform the government, Milei said “everything that can be in the hands of the private sector is going to be in the hands of the private sector,” including the state oil company YPF and state media.

He said he would push for the elimination of strict currency exchange controls — with analysts saying the official rate of the peso to the dollar is an expensive fiction.

However, Milei said he would first seek to resolve the debt issued by the Central Bank.

“If the problem of the Central Bank is not resolved, the shadow of hyperinflation will follow us at all times,” he said.

Asked about his dollarization platform, Milei said the priority was “to close the Central Bank, then the currency will be the one that Argentines freely choose.”

Asked whether he would scrap restrictions on the purchase of foreign currency that have been in place since 2019, he said “it is not an option to maintain the trap that hinders the economy.”

Milei will on Monday meet with outgoing Peronist President Alberto Fernandez.

“He called me to congratulate me and invited me to a meeting to make the transition as orderly as possible,” he said.

Milei also indicated that he will travel, privately, to the United States and Israel before taking office on December 10.

Source: AFP