September 25, 2023

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Argentina takes action against inflation and currency devaluation

Argentina takes action against inflation and currency devaluation

Argentina’s Economy Minister Sergio Massa announced on Sunday, August 27, the launch of measures to support consumption, reduce the effects of the peso’s devaluation against the dollar and curb inflation, which has exceeded 100% in a year.

“The central objective is for every sector of the economy to receive state aid in one way or another”Mr. Massa was announced. Acoustic measurements “Plan for Strengthening Economic Activities and Wages” These include tax hikes, subsidized loans for workers and vouchers for pensioners and food assistance recipients.

ÔÇťArgentina has an agreement with the Fund (International Monetary Fund, IMF) Since 2018, recent days have forced the devaluation of our currency, and the drought, the worst in our history, has not only harmed our reserves and accounts, but also affected the financial situation of many families.”The minister recalled.

Argentina is tied to a $44 billion debt deal signed in 2018 with Washington, which imposes a specific budget discipline against refinancing its debt.

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Rising inflation

With the participation of the National Bank and the Bank of Investment and Foreign Trade (BICE), Mr. Masa declared.

Other measures for the agriculture sector are coming into effect, such as the abolition of duties on exports of value-added industrial goods such as alcohol, rice and tobacco. Fertilizer distribution benefits from the same changes. The government estimates the 2023 drought losses at $20 billion, which is nearly 3% of the national GDP.

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In July, prices rose 6.3% in a month, according to analysts, and inflation reached 115% in the country in a year. And its peso has unraveled: the central bank devalued it by 20% on August 14, weakening it against foreign currencies, particularly the dollar, and potentially adding to inflationary pressures.

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The world with AFP