On 10 August 2025, President Javier Milei defended his fiscal adjustment plan in a televised address, but the Argentine University Confederation (UCA) issued a sharp warning, citing rising economic stress that leaves many families unable to meet basic needs. The debate underscores the tension between a market‑oriented agenda and social welfare concerns.
Background of the Fiscal Plan
President Javier Milei unveiled a comprehensive fiscal adjustment program on 10 August 2025. The plan includes a 40% reduction in public spending for non‑essential services, a revision of taxes to broaden the base, and a new debt‑management strategy aimed at bringing GDP‑to‑debt down from roughly 6% to below 2% within three years.
UCA’s Concerns
In a press release shared by the Argentine University Confederation (UCA), representatives warned that the adjustment policy, while necessary for macro‑stability, is exacerbating economic stress among families. Dr. Ana R. García, director of the UCA’s Economics Office, cited data from recent household surveys that show a 12% decline in real disposable income.
Milei’s Rationale
Mr. Milei defended the measures in a televised address, emphasizing that a market‑oriented framework is essential to break the cycle of inflation that has plagued Argentina for decades. He highlighted that the proposed cuts would restore confidence among foreign investors, potentially leading to a 3–5% annual growth in the next fiscal year.
Economic Outlook
Analysts predict that the adjustment will reduce the fiscal deficit to 1.5% of GDP by 2026, helping to stabilize the exchange rate and lower the inflation rate, which has remained above 80% in recent months. Economists also note that a disciplined fiscal path will lay the foundation for sustainable growth, raising wages slowly while keeping the cost of living in check.
Social Impact
While the UCA argues that the adjustments will hurt low‑income households, proponents contend that a healthier macroeconomy ultimately raises employment opportunities and improves the purchasing power of the middle class. The debate reflects a broader question about the balance between short‑term social concerns and long‑term fiscal health.