Argentines, between anguish and resignation due to adjustment measures by the Milei government

Julia González does not know how she will now be able to afford transportation on three buses and a train to her job in the center of Buenos Aires. Lucía Pergolisi cries because her best friend has been fired from her position in a government ministry. Hilario Laffite admits that she will have to highlight the prices again and again in the business where she serves.

These are some of the faces of the harsh reality that unfolds before Argentines from the battery of adjustment measures announced by the government of President Javier Milei with the alleged purpose of stopping rampant inflation and straightening the distortions of the economy.

The ultra-liberal president’s plan contemplates a reduction in transportation and energy subsidies that will lead to an increase in the price of bus and train tickets, as well as electricity and gas services. But it also includes the dismissal of public employees, the devaluation of the peso and the suspension of public works.

Despite supporting the new president, González admitted that she feels very worried because she uses several means of transportation every day to get to the house where she works as a domestic worker and her income is not enough.

“If (the ticket) goes up more, my salary will go to transportation,” González, a Paraguayan national and resident in Argentina for more than a decade, told The Associated Press while waiting for the bus to arrive.

Mother of a teenager, said she and her husband do “juggle” to make ends meet with a total income of 300,000 pesos (365 dollars) in a context of constant rising prices for food, clothing and education.

Inflation in the South American country today is 160.9% annual and Milei has warned that the rise in prices “travels at a pace of between twenty% and 40% monthly for the months between December and February.”

But González expressed hope that the situation would be reversed. “Milei has been there for two or three days. “I trust in him, so that Argentina can move forward.”said the 35-year-old woman.

The leader of La Libertad Avanza has warned that the fiscal adjustment will be harsh although inevitable to prevent the country from falling off the cliff. He has the extensive political credit that his arrival to power with 56% of the votes, but that can be liquefied in a short time in the face of a society exhausted from dealing with a gloomy scenario for years.

Jorge Martínez, who was preparing to leave a train station where he had arrived in the morning, trusted that the new Argentine president will be able to solve the problems.

“If we all do our bit, we will get out; I have hope in this government, if you don’t have hope bye, we are dead.”said Martínez, 64 years old and who works as a house painter.

The man indicated that he does not feel afraid of the distressing panorama that lies ahead: “At this point in the game and everything we’ve already been through, what fear? That’s it. “I’m afraid that they will drop a bomb and we will all disappear.”.

Martínez stated that “There is no choice but to endure” and pointed out that Argentines are used to enduring one blow after another.

Camilo Tiscornia, director of C&T Consultores, indicated that inflation will continue to be one of the great concerns in the country, where poverty already affects more than 40% of the population, largely due to the rise in prices.

“The real salary has been falling for so long and will continue to fall further. But hey, it is reality, a product of the fact that the previous government was stepping on a series of prices that it should not have done,” said the economist.

Tiscornia pointed out thatand “you will see discomfort, there will be anger” due to the skyrocketing cost of living. “In transportation it seems to me that the increases will be more limited, because they tend to be very impactful on the worker especially… The energy part is going to be more complicated.”

Víctor—who did not want to give his last name and is employed in a private cleaning company—for his part questioned the new president by maintaining that the announced measures will further worsen his quality of life.

“I don’t even have a salary of 200,000 pesos (US$243.00), I’m ashamed to say it”lamented the 55-year-old man. “People don’t understand; They think that Milei is going to change everything for them; When she starts to squeeze her tummy, we will see those who voted for her, if they can really put up with it.”

Lucía Pergolesi, 34 years old and employed at the capital’s Ministry of Education, complained that the president tightened the Argentines’ belt “where it didn’t have to be tightened.”

“This crying face I have is because my best friend has just lost her job after having joined the Ministry of Culture of the Nation last year, being a person who works overtime. “She has a partner who has been there for 15 years and did nothing during the year… They fired the newest ones, the freshest ones, who wanted to work.”lamented Pergolesi.

One of the measures announced by the Minister of Economy, Luis Caputo, involves the suspension of the renewal of labor contracts with the State that are less than one year old.

Caputo indicated that the ministries have been reduced from 18 to nine and the Secretariats from 106 to 54, which will result in a decrease in the 3. 4% “of the total political positions of the national State.”

Argentine debt bonds rose around 3% on Wall Street after the economic announcements, while the shares of companies in the South American country registered losses.

The dollar sold in the informal market, where restrictions on its acquisition do not apply, did not suffer major changes and closed at around 1,070 pesos per unit, narrowing the deep gap it maintained with the dollar in the official market, which It was quoted at 820 pesos after the devaluation established by the government.

Hilario Laffite, an employee at a designer objects store, estimated that the depreciation of the currency will trigger inflation even more. He pointed out that this overheating of values ​​will be applied to products that have already been experiencing increases for days.

“Every week they ask me to highlight. It’s not that things increase twice as much, they are small increases, but there are so many that they accumulate.”indicated Laffite.

Alberto Ramos, Head of Latin American Economic Research at Goldman Sachs, pointed out that Argentina “it has to get out of the deep overvaluation of its currency” and apply a structural, deep and concentrated fiscal adjustment in the initial phase, oriented towards spending cuts.

“And that’s exactly what the administration is putting on the table. But the next few months will be very difficult from an economic and social point of view.”, he asserted.

The General Confederation of Labor, the main union center, questioned whether the announced adjustment does not fall on the the political elite to whom Milei promised to cut their privileges, but “Once again, it falls on the people.”

He warned that he will not stay “with arms crossed” in the face of foreseeable social deterioration.

To counteract the impact of the measures on the most impoverished sectors, the government stated that it will strengthen certain aid, such as that which families receive for each of their children and that which allows them to purchase food.

Vicente Bustamante, who is dedicated to collecting with his car and then reselling paper, cardboard and other waste, fears that state assistance for the most needy will end up suffering severe cuts.

Bustamante goes daily to eat at a soup kitchen run by a group of Catholics in the marginal Barrio 31, in the center of the capital. He urged the political class and the authorities to “don’t turn a blind eye.”

“There is less work; Starting tomorrow things will go up one hundred percent… It’s sad because I have been with many families (living) on ​​the street; “It is not good for a child to grow up in the street.”he lamented.