"Milei Forecasts Sharp Inflation Drop to 18% by End-2025 Amidst Economic Reforms"

President Javier Milei has projected a significant reduction in Argentina’s inflation rate, forecasting it to decline from over 236% to 104.4% by the end of this year, and further to 18.3% by December 2025. This optimistic outlook is part of Milei’s initial budget proposal.

Milei anticipates a five percent economic growth for next year, surpassing the 3.5 percent growth predicted by analysts from the Central Bank. This projection is seen as a recovery from a recession worsened by Milei’s stringent austerity measures.

In a recent speech to Congress, Milei defended his fiscal policies and austerity measures with a combative tone, criticizing opposition lawmakers. This speech followed Congress’s failure to override his veto of a social security bill, which he argued jeopardized fiscal stability.

As his administration prepares for the midterm elections next year, Milei’s budget reflects his commitment to economic reform. Despite public spending cuts and currency devaluation, he maintains high approval ratings around 50%. Analysts suggest that demonstrating economic recovery will be crucial for maintaining public support.

The budget also projects that the official exchange rate will reach 1,207 pesos per dollar by the end of 2025, indicating a steady depreciation of the peso. Investors are awaiting details on the timeline for easing Argentina’s currency controls, a key factor for re-entering international capital markets in early 2026.

Additionally, the budget outlines plans for Milei’s economic team to negotiate a new agreement with the International Monetary Fund, aimed at replacing the existing $44 billion deal.