Newly inaugurated Argentina’s President Javier Milei has taken immediate action to streamline the government, consolidating federal ministries from 18 to nine on his first day in office. This drastic measure is part of his commitment to curbing government spending and addressing the rampant inflation plaguing the South American nation.

The presidential decree, signed shortly after Mr Milei’s inaugural address on Sunday, is set to be officially gazetted later today, signalling a swift implementation of his vision for a more efficient and cost-effective government structure.

Widely viewed as a political outsider in the traditional Argentine political landscape, Mr Milei is positioning himself as a transformative leader determined to redirect the country away from hyperinflation, which is nearing 200 per cent. With over 40 per cent of the population living below the poverty line and the peso experiencing significant depreciation, his administration faces a daunting economic scenario.

Argentina’s negative net international reserves and looming payments of over $4 billion to the International Monetary Fund (IMF) and private-sector creditors by the end of January underscore the situation’s urgency. 

The reduction in the size of the government reflects Mr Milei’s proactive approach, setting a precedent for the necessary measures he believes are crucial to overcoming decades of economic stagnation and decline.

Addressing the nation after assuming office, Mr Milei emphasised the unavoidable need for a shock adjustment, acknowledging the short-term challenges. 

Despite the anticipated worsening of the situation, he expressed confidence in the eventual fruition of their efforts, laying the groundwork for robust and sustainable growth.

“There is no alternative to a shock adjustment,” Mr Milei said after officially assuming office yesterday. “There is no money. We know that in the short term, the situation will worsen, but soon we will see the fruits of our effort, having created the base for solid and sustainable growth.”