2023-12-12 22:09:00
On the second day of Javier Milei’s government, the Minister of Economy Luis Caputo announces a package of economic measures that contemplates strong changes in exchange and fiscal matters.
“If we continue as we are, We are inevitably heading towards hyperinflation. We can reach levels of 15,000 percent annually. “We are talking regarding a liter of milk going from 400 to 60,000 pesos in the span of a year.”
“If one were to ask Argentines what the biggest problem is, more than 95% of the answers would be debt, inflation and the dollar. However, the genesis of our problem has always been fiscal. How they manifest themselves The problems are the consequences of how that deficit was financed,” said the Minister of Economy.
“We have always been addicted to the deficit, solving the consequences has never solved the roots of the problem and that is why we have fallen into recurring crises,” he added.
Presidential spokesperson Manuel Adorni had anticipated this morning that the announcement would contain “a package of measures aimed at attacking the economic emergency by virtue of containing a major catastrophe”.
At the press conference this Tuesday, December 12, Adorni pointed out that “everything What is actually announced will be in line with what was promised in the campaign and what we are convinced is what needs to be done: prevent Argentina from ending in a catastrophe”.
For the presidential spokesperson “This will be achieved by deactivating each of the bombs that this government has received. and that are public knowledge, especially in fiscal and monetary terms,” he noted.
Markets on hold
Because Caputo’s presentation was following the markets closed, We will have to wait until Wednesday to find out how the economic and financial actors received the first announcements from the Milei Government.
The business sector expressed its support for Javier Milei at the beginning of his mandate
For example, yesterday Monday on the first day of administration of the libertarian government and within the framework of a virtual exchange holiday, not many operations were recorded. The blue dollar began to rise almost at closing time and climbed to $1000. The financiers also quoted at values between 980 and 990 pesos. Those that did rise were the stocks that registered a jump of 3.7%.
It is worth remembering that, prior to the opening of local markets, The Central Bank (BCRA) decided to apply the prior compliance rule to all demand operations carried out through the exchange market.
“The measure was ordered to give time to the management of the Executive Branch to comply with the administrative procedures for the formation of the new authorities and to announce and implement the policies that they will carry out.”according to the monetary authority.
However, several private entities raised the retail dollar at $700 regarding the closing of banking hours. In this way, this segment experienced a growth of almost 30% in Milei’s brief management. This increase placed the price known as “savings” above $1,300.
They assure that, “an adjustment is coming that we have not seen in modern history”
The chainsaw started with 34% fewer public officials
The presidential spokesperson indicated that Cuts in State spending began to face the scenario which several members of the government have described as: “critical”, “devastating” and “serious”.
“The situation is critical”Adorni indicated and explained that the reductions that the government began to make are already defined, although there is still no information on the number of people affected.
Regarding the ministriesAdorni noted that They were reduced by 50%. “From 18 it went to 9 ministries.”
He also noted that “in terms of secretariats Until December 1 there were 106. In this administration the Secretariats of State become 54 (46% reduction) and in Undersecretaries, Until December 10 there were 182, now there are 140, that is, a reduction in the number was made. 23%.
Regarding the number of people affected, Although a precise number was not indicated, the spokesperson pointed out that “The reduction of different levels of officials was 34%.”
On the way to justifying the official decision of the cut, the spokesperson expressed: “We are heading towards hyperinflation and the objective is to avoid it. Hyperinflation is the absolute rejection of the currency and the spiralization of prices. The inflation that we are going to avoid is going to surely be much more devastating than the one remembered in the 89s and 90s,” he commented.
The other measure that aims to cut spending and that the libertarian government has already implemented is to begin the review of contracts and State appointments from the last year, as well as suspending the official media guidelines for one year, information that has already had circulated the previous day.
LR
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