2023-12-13 06:00:00
The Argentine Minister of Economy, Luis Toto Caputo, on Monday in Buenos Aires. AGUSTIN MARCARIAN | REUTERS
A strong devaluation of the peso and the end of most subsidies for services are expected between the months of January and March
13 dic 2023 . Updated at 05:00 a.m.
Argentina was waiting On Tuesday night, with great expectation, the announcement of the first concrete adjustment measures of the Government of Javier Milei. The Argentine president already announced cuts worth 5% of GDP at his inauguration. Among the expected measures, according to leaks to the Argentine press, are the devaluation of the peso in the official currency market. The exchange rate until this Tuesday was 400 pesos for every dollar. In the Argentine media it was suggested that the new amount could amount to between 700 and 800 pesos for each unit of the US currency.
Also public work would be suspended, except for those that have external financing; transfers to the provinces; and perhaps a mechanism would be announced to facilitate privatizations, also ending most of the subsidies for services such as electricity, water or gas in a progressive, but short, manner between the months of January and March.
At press time, the announcement, planned as a recording, and not a press conference, had not yet occurred. It was scheduled for 5:00 p.m. local time, but it was delayed. According to the Telenoticias media, because, around six in the afternoon, the message was being rerecorded. The reason was not revealed, but it was speculated that they wanted to measure the words in detail and polish the message.
The Government’s intention, announced on Monday, is to carry out a thorough audit of the public sector to combat what in Argentina is known as militant employment, that is, those who have obtained their employment for political reasons and not for merit. They will review about 9,000 appointmentsespecially those that were signed in the last six months.
The presidential spokesperson, Manuel Adorni, has already announced, in addition, that the secretariats of the ministries will be reduced from 106 to 56 and the undersecretaries, from 182 to 149. We are heading towards hyperinflation and the decision is to avoid it. The inflation that we are going to avoid will surely be much more devastating than the hyperinflation of 1989 and 1990, the spokesperson highlighted, mentioning the economic crisis of the last Government of Rál Alfonsín.
Furthermore, on Tuesday, before Caputo’s announcement, it was also reported that The Government suspended official advertising in the media during the next year. I wish we had had the balls to do this, support community media and support jobs in SMEs. Does it bother you that I say that? Screw you. I never wanted to subsidize the hegemonic media and beg for mercy in exchange for the people’s money, said the Peronist presidential candidate in the August primaries, Juan Grabois, evaluating the measure.
The measures announced probably will cause ups and downs this Wednesday, during the opening of the markets. For this reason, the president of the Central Bank, Santiago Bausili, will receive today, before 8:00 a.m. local time, the leaders of the banks inside the institution’s headquarters, which Milei promised to close. Continue the exchange gap at least in the short term. The dollar cost 1070 pesos in the informal foreign exchange market yesterday, 7% more than the previous day, and could continue to grow, stretching inflation immediately and also the devaluation of real wages.
Last Friday, the price agreement between platforms, producers and the previous Government ended, and since then the supermarkets have received lists with increases of up to 50% in the value of widely consumed products, but in many cases we are waiting for new agreements. Many analysts estimate December inflation at 20%.
Filed in: Argentina Javier Milei Electricity Financial crisis
#Argentina #awaits #announcement #government #measures #ultraliberal #Milei