Argentina's President Javier Milei announced on Tuesday that his administration will not renew contracts for more than 5,000 employees hired in the year preceding his inauguration on December 10, AP reports.

This move is part of a comprehensive plan of cutbacks and devaluations aimed at revitalizing Argentina's struggling economy.

President Javier Milei, a right-wing libertarian, has pledged to address the country's challenges, including soaring Argentina inflation, which is expected to reach about 200% by year-end.

The focus of his economic strategy involves reducing government regulations, streamlining payrolls, and facilitating the privatization of state-run industries to stimulate exports and investment.

The cutbacks, although met with protests, are part of Milei's commitment to rebuilding the country, restoring individual freedom and autonomy, and dismantling regulations that have impeded economic growth.

Approximately 300 changes have been announced, targeting the privatization of government companies and adjustments to protections for renters, employees, and shoppers.

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Argentina Inflation and Economic Woes

Argentina, already grappling with the world's third-highest rate of inflation, witnessed an accelerated economic downturn following President Javier Milei's inauguration, according to the New York Times.

The swift devaluation of the Argentine currency exacerbated Argentina's inflation woes, leaving many of its 46 million citizens reevaluating their financial strategies.

Manuel Adorni, spokesman for President Milei, acknowledged that accelerating inflation was an inevitable consequence of addressing the country's economic distortions.

"We've been left with a multitude of problems and unresolved issues that we have to start addressing," he said, adding that the country will go through months of high inflation.

Milei has been transparent about the initial hardships his economic reforms may bring, emphasizing a commitment to end the country's "model of decline."

Protests Emerge Against Economic Decree

Thousands of Argentines took to the streets last week to voice opposition to President Javier Milei's decree, Reuters noted.

Demonstrations featuring crowds banging pots and pans were reported in cities such as Rosario, Mar del Plata, Córdoba, and Buenos Aires.

The Buenos Aires S&P Merval index experienced fluctuations, and bond spreads narrowed as investors gauged the government's ability to meet debt obligations.

President Milei's decree comprises more than 300 measures, prompting concerns from lawmakers who have the power to block the proposals.

The measures align with investor expectations, and analysts suggest that the price impact on bonds may be limited.

Argentina President Javier Milei's coalition, La Libertad Avanza, holds a minority of seats in both houses of Congress, leading some to question the approach of proposing changes through decrees rather than laws approved by Congress.

Despite the concerns and protests, President Milei remains steadfast in his commitment to implement what he terms "shock therapy" for the country's economic woes.

Argentina, facing recession, triple-digit annual Argentina inflation, and a rising poverty rate, has resorted to bridge loans to meet international obligations.

The economic challenges that Argentina faces have paved the way for Argentina President Javier Milei, a political outsider, to assume office.

His background as an economist and television pundit has positioned him as a force for change, advocating against corruption and economic mismanagement that he believes has plagued the country for years.

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Written by: Bert Hoover

WATCH: Protesters rally in Argentina against President Javier Milei's government - From Associated Press