(Bloomberg) -- President Javier Milei announced Argentina’s first quarterly fiscal surplus since 2008 during a televised speech, promising his commitment to eliminating deficits wouldn’t waver throughout his term.

“The fiscal surplus is the cornerstone from which we are building a new era of prosperity in Argentina,” Milei said Monday night, flanked by his economic team at the presidential palace in Buenos Aires. “We are making possible the impossible even with the majority of politics, unions, the media and most economic actors against us.”

The crisis-prone South American nation posted a quarterly fiscal surplus of 0.2% of gross domestic product to start the year, as well as a third consecutive monthly surplus in March, Milei said. The libertarian economist pledged to stick with austerity because “inflation is robbery and fiscal deficit is the cause of inflation.”

Argentina bonds jumped as investors awaited Milei’s announcement, leading gains in emerging markets on Monday.

“Argentina continues to be a good trade,” Diego Ferro, founder of M2M Capital in New York, said by phone after the president’s speech. But he cautioned that the surplus is still an intermediary step. 

“What they accomplished was impressive, but based on very short term measures,” Ferro said. “Unless it changes into structural changes, it will likely become another ‘I told you so story’ ending in tears.”

Argentina achieved its rare surplus by slashing three quarters of transfers to provincial governments and halting nearly 90% of public works, Milei said. The government also kept costs low by allowing nearly 300% annual inflation to erode real public spending on wages and pensions.

“Milei’s streak of fiscal surpluses is certainly good news — but the big question is how sustainable it is,” Adriana Dupita, deputy chief emerging markets economist with Bloomberg Economics, said by email. “Much of the positive performance has come at the expense of high inflation eroding the purchasing power of public sector salaries and pensions, and virtually halting public investment and transfers to provinces. This strategy cannot last long.”

Since taking office, Milei has devalued the currency by more than 50%, halved the number of government ministries, removed hundreds of price controls and started to cut generous energy and transport subsidies. Monthly inflation has been slowing consistently from a three-decade high of 26% in December.

Milei promised Argentines during televised address their sacrifice would pay off in the form of fewer taxes in the future.

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