Argentine President Milei Secures Economic Reform Pact Amid Crisis

Argentine President Javier Milei has signed a long-awaited pact with provincial governors to gain support for economic reforms. The deal aims to address the ongoing economic crisis, reduce public spending, and achieve a balanced budget. The 'May Pact' was delayed but underscores bipartisan cooperation.

Argentine President Javier Milei signed a critical pact with provincial governors early on Tuesday, aiming to garner broader support for urgent economic reforms. This agreement, reached just after midnight with 18 governors, is designed to mitigate market concerns over Milei's capacity to navigate Argentina's dire economic crisis. Inflation has soared to nearly 300%, and half the population now lives in poverty.

Speaking in the historic city of Tucuman, Milei, a radical libertarian economist, emphasized, 'Argentina finds itself at an inflection point. The people demand a change of direction.' Despite Milei's initial market rally in December, economic conditions have worsened, causing the peso to weaken and political tension to rise.

Milei's party, La Libertad Avanza, lacks a parliamentary majority and must negotiate with other political parties. The pact focuses on a balanced budget, public spending cuts, and tax and labor reforms. Cordoba's Governor Martin Llaryora praised the bipartisan effort for national management. However, market reactions remain volatile, with the peso hitting a record low. The deal, known as the 'May Pact,' commemorates Argentina's early revolutionary history.

(With inputs from agencies.)