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In Argentina, the new government of Javier Miley devalued the peso by more than 50% and tightened the budget screw

In Argentina, the new government of Javier Miley devalued the peso by more than 50% and tightened the budget screw

The Argentine government of liberal President Javier Miley, which was inaugurated on Sunday, December 10, announced on Tuesday, December 12, a strong devaluation of the national currency by more than 50% of the peso, to 800 pesos to the dollar, to stabilize the economy in the grip of… The country. Inflation and chronic debt. The devaluation of the peso, which was considered significantly overvalued, to just under 400 to the dollar, is part of a series of measures. “emergency” Announced by Economy Minister Luis Caputo, including reductions in public energy and transportation subsidies.

The Minister explained in his speech that these measures aim to avoid… ” disaster “ Of hyperinflation which, according to him, may reach 15,000%. “The root of our problems has always been budget.”Mr. Caputo said, believing that for the first time, by voting with a large majority for Javier Maile, Argentines had shown that they understood “there is no money”.

The devaluation of the currency, as well as the reduction of transport and energy subsidies, are expected to initially have a strong and negative impact on the purchasing power of Argentines, 40% of whom live below the poverty line. To them, the Minister of Economy assured that the government will continue social programs to help obtain employment opportunities “Promoting social policies for those who need them without intermediaries”insisted, like “food cards” (Purchase vouchers for the most disadvantaged groups).

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Inflation at 143% in one year

President Miley made this clear in his inauguration speech on Sunday “The situation would have worsened in the short term.” Before the economy, the third largest economy in Latin America, reaps the fruits of budget austerity, by controlling chronic inflation, which currently stands at 143% over one year.

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Minister Caputo also announced, in favor of budget austerity, that the state “He will not make any more offers.” For public works sites and cancellation of previous contracts “And it hasn’t even started yet”. “Infrastructure projects in Argentina will be implemented by the private sector, because the state has neither the money nor the financing to implement them.” It is to explain.

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The world with Agence France-Presse