Argentine Economy Minister Sergio Massa announced on Sunday August 27 the launch of measures to support consumption, reduce the effects of the devaluation of the peso against the dollar and control inflation that exceeds 100% over one year.
“The central objective is that each of the sectors of the economy receives in one way or another the help of the State”, declared on Instagram Mr. Massa, candidate of the power in the planned presidential election. on October 22 and third in the last primaries at the national level (27%). Measures of its “Economic Activity and Wage Enhancement Program” include tax boosts, subsidized loans to workers, and vouchers for pensioners and food aid recipients, among others.
“Argentina has a loan contracted with the Fund (International Monetary Fund, IMF) since 2018 which has forced in recent days a devaluation of our currency and, in addition, a drought, the worst in our history, which has hurt our reserves and to our accounts, but also affected the financial situation of many families,” the Minister recalled.
Argentina is linked to the Washington institution by a loan of 44 billion dollars contracted in 2018 which imposes a certain budgetary discipline against the refinancing of its debt.
Galloping inflation
Mr. Massa also announced the creation of a fund to pre-finance exports, worth 770 million dollars, with contributions from the National Bank and the Investment and Foreign Trade Bank (BICE).
Other measures, for the agricultural sector, come into force, namely the abolition of taxes on the export of value-added industrial products such as wine, rice and tobacco. Fertilizer deliveries benefit from the same changes. The government estimates the losses caused by the 2023 drought at $20 billion, almost 3% of the national GDP.
In July, prices rose 6.3% month on month, analysts said, as year-on-year inflation hit 115% in the country. And its peso is unscrewing: the Central Bank devalued it by 20% on August 14, which makes it weaker against foreign currencies, especially the dollar, and may increase inflationary pressures.
