2023-12-14 00:59:20
The new government has presented an emergency package to avoid hyperinflation in Argentina, just when the country registers 160.9% inflation.
The Minister of Economy of Argentina, Luis Caputohas been in charge of giving the starting signal and announcing the package of emergency measures to alleviate the crisis that Argentina is going through. “We are definitely facing the worst legacy in our history, a country where Argentines are increasingly poorer”stated Caputo.
A package that measures biggest economic cut that is remembered in the country: 50% currency devaluationsuspension of public works, reduction of energy and transportation subsidies, reduction of civil servants… President Javier Milei was clear with his citizens: “There’s no money”, and do not hesitate to warn them that difficult times will come. He does so just when the country encounters a 160.9% inflation.
“I think that commerce, which is where I work, is going to receive the hardest hit. If we have already been in crisis for so long, let us be there a little longer to be able to move forward, it seems to me that we can withstand the blow.”says Tatiana Victor, a saleswoman from Buenos Aires, laughing.
A step back to gain momentum
Shock therapy, according to Milei, is a step back to gain momentum with an impact that will affect, especially the working class. Ariel Slipak, economist and professor at the University of Buenos Aires, for RFI: “The incoming government was very skillful in weaving a speech, where the costs of these measures are attributed to 100 years of Argentine decadence. These measures will generate a significant increase in the cost of living for the Argentine population, in general. Both at the lowest income and at the middle income”.
Despite the controversy generated by these adjustments, the International Monetary Fund has already supported these first measures. A approval that does not convince experts due to the previous history between Argentina and the IMF.
Read alsoMilei promises an economic “shock” upon assuming the presidency of Argentina
Argentina is tied to a program with the IMF for the debt of 45,000 million dollars which he contracted in 2018. Before April 2024the country is obliged to cancel 10 billion dollars with international organizations and private creditors.
“It is quite logical that the International Monetary Fund reacts in this way, because in general, they are adjustment plans and megadevaluations, even in debt renegotiations, which in the Argentine case will not be carried out”explains Slipek.
Not all are cuts. The new government has also announced that will increase the amount of social assistance Because, the crisis will get worse in the coming months and the working class will be the ones that will be affected the most with the increase – even more – in prices of basic products and the devaluation of the currency.
A tough start to the legislature but, as the Minister of Economy stated this Wednesday, the government prefers “tell an uncomfortable truth rather than a comfortable lie” to the Argentines.
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