Argentina is making South American style socialism look bad.

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Argentina’s Economy Ministry announced Friday that the public sector had a AR$523.4 billion financial surplus in October — the ninth consecutive month in which the national government registered a positive fiscal balance. Javier Milei, who campaigned on building surpluses, has been able to achieve his aims by enacting abrupt and often draconian austerity measures.

The primary fiscal balance represents the difference between a government’s revenues and its expenditures, whereas the financial balance constitutes that difference plus net interest payments on public debt. The government secured surpluses for each.

“This compares to a financial deficit for the same month of 2023 of AR$454 billion, which is equivalent to AR$1.3 trillion pesos adjusted for inflation,” Economy Minister Luis Caputo posted on X. “In other words, the difference in financial results versus October 2023 is AR$1.8 trillion.”

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A report by the Center of Argentine Political Economy (CEPA) found that between January and September of this year, 25.3% of the adjustment in state expenditure could be attributed to cuts to retirement benefits in the form of payments failing to keep pace with higher costs of living. The report added that Milei modified the pension update formula by tying it to inflation, which meant that retirees and pensioners “would not lose purchasing power, but neither would they be able to recover.”

Economist Martín Vauthier said the “financial surplus was achieved through a sustainable program” in an X post shared by Caputo.

“It includes a sharp reduction in government structural expenses and outlays that do not correspond to the [national administration’s] functions,” he added.

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