New Administration: Argentina’s President Javier Milei has warned the country to prepare for severe economic shock

Argentina’s new President Javier Milei has warned his country’s people to prepare for painful austerity measures as he seeks to turn around decades of economic stagnation and decline.

Taking office on Sunday after his upset election last month, Milei used his inaugural address to prepare Argetinians for the short-term hardship he insists is necessary to fix the biggest crisis in the country’s history.

In a break with tradition, the 53-year-old economist delivered his speech to supporters with his back turned to the legislature.

“There is no alternative to a shock adjustment,” Milei said after taking the presidential baton and sash. “There is no money.”

Guests at the inauguration included Ukrainian President Volodymyr Zelenskyy, Hungary’s nationalist Prime Minister Viktor Orban, right-wing former Brazilian leader Jair Bolsonaro, Uruguay’s conservative leader Luis Lacalle Pou and Chile’s leftist President Gabriel Boric.

Latin America’s third-largest economy, which has stumbled between crises for decades, is grappling with annual inflation of higher than 140 percent and a 40 percent poverty rate.

The country owes $45bn to the International Monetary Fund.

Milei, who is known for hard-right libertarian views, has promised a series of radical measures to fix the economy, including spending cuts equivalent to 5 percent of the economy and switching the Argentinian peso for the United States dollar.

A self-described “anarcho-capitalist”, Milei on Sunday reiterated that the state would shoulder the burden of getting the country’s finances in order.

“We know that in the short term, the situation will worsen, but soon we will see the fruits of our effort, having created the base for solid and sustainable growth,” he said.

In one of his first actions in office, Milei announced on social media that he had signed a decree to slash the number of ministries by half, from 18 to nine.

Milei, whose abrasive style has drawn comparisons with former US President Donald Trump, rose to fame with his diatribes against the “thieving” political class and invocations of Argentina’s “golden age” during the early 20th century.

His anti-establishment message struck a chord with Argentinians, particularly young men, after successive governments presided over the country’s decline from one of the richest economies to a cautionary tale of economic mismanagement.

Milei decisively beat former Economic Minister Sergio Massa of the centre-left Peronist coalition in a run-off election on November 19.

Still, Milei will need to negotiate with rivals to govern effectively as his coalition bloc lacks a majority in the legislature.

There have been signs that the political maverick could soften his more radical positions in office.

His cabinet includes mainstream conservatives in favour of ideological libertarians, while talk of shutting the central bank and dollarisation has dissipated in recent weeks.