BUENOS AIRES, Argentina (AP) — Argentina on Tuesday announced a deep devaluation of its currency and cuts to energy and transportation subsidies as part of a new shock adjustment. President Javier Millay It says it is needed to deal with an economic “emergency.”
Economy Minister Luis Caputo said in a televised message that the Argentine peso would be devalued by 50%, from 400 to 800 pesos to the dollar.
“For a few months, we’re going to be even worse than we were before,” Millais said. He spoke shortly after the liberal was sworn in as president of South America’s second-largest economy. Warning of severe measures.
Mr Millais said the country had not had time to consider other options.
Argentina suffers from 143% annual inflation, its currency has collapsed and four out of 10 Argentines are living in poverty. The country also has a staggering $43 billion trade deficit, as well as a daunting $45 billion in debt to the International Monetary Fund, and is expected to meet its multilateral creditors by April. $10.6 billion will be paid by private creditors.
Caputo said that as part of the new measures, the government would cancel all public works tenders and cut jobs in some states to reduce the size of government. He also announced cuts to energy and transportation subsidies, without providing details or amounts.
He said steps were needed to reduce the budget deficit, which is believed to be the cause of the country’s economic problems, including soaring inflation.
“If things continue like this, we will inevitably head towards hyperinflation,” Caputo said. “Our mission is to avoid catastrophe.”
The IMF welcomed the move, saying it provided a “good basis” for further talks with Argentina over its debt.
IMF spokeswoman Julie Kozak said in a statement: “These bold initial steps are aimed at significantly improving public finances by protecting the most vulnerable in society and strengthening the exchange rate regime.” said. “Their decisive implementation will help stabilize the economy and lay the foundations for more sustainable private sector-led growth.”
The words “I don’t have money” are repeated frequently in Millais’s speeches, and he uses them to explain why a gradualist approach to the situation is not a starting point. But he promised that the adjustments would almost entirely affect the nation, rather than the private sector, and would be the first step toward restoring prosperity.
Millais, a 53-year-old economist, rose to fame on television with his profane rants against what he calls political castes. He used his popularity to win a seat in Congress and then ran for president just as quickly.Overwhelming victory for self-proclaimed “anarcho-capitalists” August primary election It shocked the political world and upended the race.
Argentines are disillusioned With the economic situation as it is, they find themselves receptive to outsiders’ wild ideas to improve their plight and transform the country.He won the election on November 19th. Be bold in the second round He dispatched the Peronist political forces that had ruled Argentina for decades. Still, he is likely to encounter fierce opposition from Peronist movement lawmakers and trade unions controlled by the movement, whose members say they refuse to cut wages.
On Sunday, Milley was sworn in inside the Capitol, where outgoing President Alberto Fernández handed him the presidential sash. Some of the assembled lawmakers shouted “Freedom!”
Many Argentines wonder which chain-saw-wielding anti-establishment crusader Mirei will rule their country. Campaign trajectoryor the more moderate president-elect that has emerged in recent weeks.
As a candidate, Milay pledged to root out corruption in the political system, abolish the central bank, which she has accused of fueling inflation by printing money, and replace the rapidly depreciating peso with the US dollar. .
But after his victory, he named Caputo, a former central bank governor, as his successor. his economic minister And one of Mr. Caputo’s allies appears to have taken control of the bank and put its much-touted dollarization plan on hold.
Milley, like former US President Donald Trump, had cast himself as a willing fighter against the creeping global socialism. praise openly.
But he said in his inaugural address that he had no intention of “persecuting anyone or settling old vendettas” and that politicians and trade union leaders who wanted to support his project “would be welcomed with open arms.” ” he said.
His moderation is difficult given the scope of the immense challenges ahead, his political inexperience, and the need to forge alliances with other parties to implement his policies in Congress. It may come from realism.
