Argentina’s government begins second phase of economic stabilization – 2024-07-04 23:25:36

by times news cr

2024-07-04 23:25:36

The Argentine government is starting the second stage of economic stabilization after the parliament approved a package of reforms. This was announced on Friday by the country’s Economy Minister Luis Caputo, Day.Az reports with reference to TASS.

“We are already in the second stage of the stabilization plan, which mainly consists of closing the second tap of money emission. The first was the budget deficit, the second was the interest that the central bank pays on obligations,” he said at a press conference. According to the minister, the authorities’ goal at this stage is to strengthen confidence in the Argentine economy.

Caputo acknowledged that the currency restrictions in place in the country since September 2019 will not be lifted until the second stage of economic reforms is completed. “The end of restrictions is the third stage, which will be the growth stage. We do not have an exact date, we have defined the parameters, primarily in the macroeconomic sphere, upon reaching which we will do this,” Caputo said.

The minister also said that the government’s promised reduction in the tax on currency transactions will take place in “August-September.” Currently, this tax is 17.5%.

On June 28, the parliament completed its consideration of the government’s package of reforms to deregulate the economy and sent the document to President Javier Miley for signature. The approved document grants the president special powers, reforms the labor sphere in favor of employers, creates a regime for stimulating large investments and provides for the privatization of a number of state-owned companies.

Miley, who took office as president on December 10, 2023, in his first speech as head of state described the situation in the country as critical and declared the need for shock measures in the economy. The libertarian politician advocates for minimal government intervention in the economy and sees the solution to Argentina’s economic problems in eliminating the budget deficit by cutting spending. According to researchers at the Catholic University of Argentina, the poverty rate in the country increased in the first quarter of the year against the backdrop of the Miley government’s shock measures from 49.5% to 55%. Unemployment in the country increased from 5.7% to 7.7% during the same period, and the GDP fell by 5.1%.

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