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Milei is already proving the left-wing economic establishment wrong

Last week, Milei announced that the country had posted its first quarterly budget surplus since 2008, a modest 0.2 percent of GDP, but still an astonishing achievement in such a short time, especially for a country that has experienced deficits for 113 of the past 123 years.

Then earlier this week, the central bank, which has not yet been able to abolish Milei as he had promised, cut interest rates for the third time in three weeks. Although they are still at an eye-watering level of 50%, this will have an impact on the economy very soon. Investors have started to notice.

According to Bloomberg data, the peso was the world’s best-performing currency in the blue-chip swap market in the first quarter of this year, and bond markets are also on the rise.

Things may also get better in the coming months. As prices stabilize and the currency appreciates, investment should start flowing again to a country rich in natural resources and hyper-competitive on labor costs.

If Milei can deliver on his promise to unlock the country’s vast reserves of shale oil and gas – using technologies that have proven safe and successful in the US – the economy could even boom.

If so, Argentina would defy a global economic establishment addicted to bigger government, more regulation and rising budget deficits.

We are constantly lectured, not least by Shadow Chancellor Rachel Reeves, and by President Biden and his minions in the United States, about the need for an active state, an industrial strategy and more borrowing to pay for investment. the key to industrial and economic leadership, not its enemy.

The IMF, meanwhile, has all too often been a major cheerleader for Argentina’s failed governments of the past, providing the country with the largest loans in its history.