2023-12-13 02:16:03
The tightening of budgetary screws has started in Argentina. The government of the new ultraliberal president Javier Milei, inaugurated on Sunday, announced on Tuesday a sharp devaluation of more than 50% of the peso, to stabilize the economy plagued by chronic inflation and debt. The national currency thus increases to 800 pesos for the dollar.
The devaluation of a peso that was considered notoriously undervalued, to just under 400 to the dollar, is part of a series of “emergency” measures announced by Economy Minister Luis Caputo, including a reduction in public subsidies for energy and transport. These measures, explained the minister in a speech, aim to avoid the “catastrophe” of hyperinflation which, according to him, could reach 15,000%.
” There is no money “
“The genesis of our problems has always been budgetary,” affirmed Luis Caputo, estimating that for the first time, by voting with a large majority for Javier Milei, Argentines showed that they understood “that there is no no money “.
The devaluation, as well as the reduction in long-standing subsidies for transport and energy, is destined to initially strongly and negatively affect the purchasing power of Argentines, 40% of whom live below the poverty line. To their attention, the Minister of the Economy assured that the government will maintain social programs to help with access to employment and “strengthen social policies for those who need them, without intermediaries”, a- he insisted, like “food cards”, these being vouchers for the most deprived.
Milei warns that the situation will initially “get worse”
President Milei indicated in his inauguration speech on Sunday that “the situation was going to get worse in the short term” before the economy, the third largest in Latin America, reaps the benefits of budgetary austerity, by controlling chronic inflation. , currently at 143% over one year.
Minister Caputo also announced, in the interest of budgetary austerity, that the State “will no longer present offers” for public projects, and will cancel contracts signed “which have not already started”. “Infrastructure projects in Argentina will be carried out by the private sector, because the State has neither money nor financing to carry them out,” he explained.
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