Javier Milei sworn in as Argentina's President

Argentina’s libertarian economist Javier Milei took office on Sunday and warned in his maiden speech that he had no alternative to a sharp, painful fiscal shock to fix the country’s worst economic crisis in decades, with inflation heading towards 200 per cent.

“There is no alternative to a shock adjustment,” he said on the steps on Congress after taking the presidential baton and sash, with crowds of supporters cheering despite Javier Milei saying the economy would worsen in the short term. “There is no money,” he added.

Milei, 53, a former TV pundit who shot to fame with expletive-ridden tirades against rivals, China, and the pope, is taking over from Peronist leader Alberto Fernandez, whose government was dogged by failures to rein in soaring prices.

“The outgoing government has left us on track towards hyperinflation,” Milei said. “We are going to do everything we can to avoid such a catastrophe,” he said.

The La Libertad Avanza leader added that key policies will include making fiscal cuts equivalent to around 5% of Argentina’s total Gross Domestic Product (GDP), with the measures likely to affect the state rather than the private sector.

Meanwhile, Javier Milei didn’t mention the US dollar in his speech Sunday, in the latest sign he may be backing away from one of his more radical election promises.

The libertarian economist had pledged to scrap the peso and replace it with the greenback in a “Hail Mary” move he believes would mend Argentina’s broken economy by breaking a cycle of policymakers printing more pesos to help the country’s pay its debts.

But he’s subsequently shown signs of pragmatism, breaking with key economic advisor and dollarization advocate Emilio Ocampo and appointing moderate rivals to key roles within his Cabinet.