Argentina is trying to get back up with austerity. President Mauricio Macri today announced the plan to avert the financial crisis and stem the unstoppable collapse of the peso.
The Argentine currency, after the heavy declines in May which forced Buenos Aires to appeal again to the International Monetary Fund, has lost more than a third of its value over the last few months, forcing the president to run for cover more quickly, and harder, than expected. In August, the peso lost 38% of its value, depreciating by 20% in just one week and reaching 34 pesos per dollar.
In detail, the program illustrated by Macri establishes the suppression of various ministries and higher taxes on exports. The aim is to reduce the deficit, stabilize the economy, but above all stop the free fall of the national currency. Not only that, through these "promises" the Argentine president hopes to convince the IMF to bring forward the concession of the $50 billion in aid approved last June. In fact, just tomorrow the government of Buenos Aires will be in Washington to discuss the matter.
We recall that the agreement reached three months ago envisaged the disbursement by the Monetary Fund of a "stand-by" loan of 50 billion in various tranches scheduled for 2020 and 2021. Tomorrow, Argentina will ask instead anticipate the arrival of the first installments to 2019 as early as XNUMX.
"We have to face a basic problem - he said - that is not to spend more than we have, to make efforts to balance the state accounts".
"Let's face the difficulties in the best way - continued Macri - we will overcome the crisis by taking care of the most needy". Precisely for this reason, the plan also establishes the increase of food aid programs and establishes ceilings on the prices of some basic products
Argentine Finance Minister Nicolàs Dujovne provided more details on the plan put forward by the Government. Buenos Aires aims to “reach a balance of its fiscal spending, before taxes, as early as 2019”. The agreement reached in June with the IMF provided for a deficit of 1,3%
As for the new tax on exports, the minister specified that "for key products such as soybeans, the tax will be four pesos per dollar, and three pesos for other export sectors." It will be, he specified, a "transitional" export right for 2018 and 2019 which should help reduce the budget deficit by 1%.
