President Javier Milei welcomed January’s inflation figures as a slowdown and lashed out against politicians who rejected his omnibus bill reform package in an hour-long interview with LN+ television channel on Wednesday night.

Asked about inflation, which was 20.6% in January, Milei acknowledged it was  a “truly horrific” number, but claimed the figure was a relative victory, arguing that prices had been rising by 1% per day in early December, putting the country on course for 3600% yearly inflation. Some indicators suggested hyperinflation of 15,000-17,000% per year, he added.

He also claimed that the wave of inflation that started when he took office reflected monetary excess and the removal of price agreements that, in his view, kept prices artificially low.

Inflation leaped from 12.8% in November to 25.5% in December.

He noted that his government has dismissed 50,000 public employees, eliminated 200,000 welfare programs that were “given irregularly,” and cut discretionary transfers to provinces by 98%. In addition to this, Milei also cut public works contracts, which he described as a “giant source of corruption.”

When asked how his measures affected incomes, he argued that the population would be worse off if the country had entered hyperinflation. 

The president argued that inflation is always monetary, comparing emission to trying to photocopy a plate of pasta. “If we’re going to eat dinner and we have pasta for the two of us, but then Esteban and Luis come along. So I put the pasta in the photocopier and print two sheets of pasta. I don’t think they’ll be very happy, because we still have two plates of pasta.”

He also hit back at former President and Vice President Cristina Fernández de Kirchner, who earlier in the day published a 33-page document claiming that Milei’s economic plans would wipe out Argentina’s scope for growth. 

In the document, she argued that dollar scarcity, not money printing, is the main driver of inflation. This, Milei described as a “gross conceptual precariousness that you could have believed in the 60s but not now.” He accused Kirchnerism of squandering international reserves.

When asked what he thought about Kirchner calling him a “showman economist” in her document, he was calm, saying, “It’s fine, that’s her opinion… Maybe these new times need a little show, too” — before calling her “ignorant of some basic economic matters.”

The chainsaw and the blender

Asked about how his plans for tight austerity would proceed, he replied: “The chainsaw and the blender, which are the pillars of the adjustment, are not negotiable.” He also insisted that his government would reach zero fiscal deficit and balance the Central Bank’s books. Milei promised that once this happens, his government would be able to release currency controls.

Asked about the omnibus bill reform package, which fell through last week after deputies voted to send it back to congressional commissions, he said it had failed because politicians “don’t want to give up their privileges.”

According to Miei, the law had two objectives. “One was to finish organizing the political spectrum and the other, to propose reforms,” he said. “For years, I’ve proposed that it’s necessary to organize the political spectrum so people know what they’re voting for on one side and on the other.” He called many politicians “criminals” and “wolves in sheeps’ clothing.”

Since the bill collapsed, Milei has repeatedly claimed that it was a strategy to get politicians to show their true colors.

“People detest and despise politicians,” he said, visibly animated. “They feel disgusted by politicians. And you know what this vote showed? That they’re right!”

He denied that he had increased taxes and promised to cut them once the economy stabilizes, arguing that his plans to cut the fiscal deficit by five percent of GDP would more than make up for the difference from any hikes. 

Despite previously stating that he would “cut off [his] own arm before raising taxes,” Milei’s omnibus bill proposed increasing export duties on soy oil and soy meal from 31% to 33%. His government reversed course on plans to lower the income tax threshold just days after presenting it, faced with pressure to secure support for the omnibus bill.

Dollarization 

Milei said that he still plans to dollarize the economy. He claimed that Argentina’s monetary base is US$8 billion and the central bank has bought US$7 billion, meaning 87.5% of Argentina’s monetary base is covered. However, he cited the Central Bank’s interest-bearing liabilities and a financial reform to prevent bank runs as hurdles to overcome. 

“If we keep cleaning up the Central Bank’s balance sheet at the current rhythm, the IMF estimates that we could remove currency controls half way through the year. I’d prefer to wait for the numbers.”

If his plans go ahead, the peso would “cease to exist,” he added. 

Regarding proposals over the past week for a formal alliance between his La Libertad Avanza coalition and the right-wing PRO party of Patricia Bullrich and Mauricio Macri, the president was enthusiastic. 

“What did I say even before the primaries? Let’s go together; let’s have an internal race, the winner governs and the loser accompanies them,” he said, adding that PRO supported his legislative proposals in Congress. 

He emphatically denied making concessions to Bullrich and Macri in exchange for their support.