On Monday (11), the first working day of his term (he takes office on Sunday), the elected president of Argentina, Javier Milei, is expected to present an economic package that includes major spending cuts and a strong devaluation of the Argentine peso against the dollar.
The details were provided by the Clarín newspaper. The measures include a cut in public spending of 5.5% of GDP, as the new Economy Minister, Luís Caputo, projected a “zero deficit” in the first year of Milei’s administration.
According to Clarín, measures have been established for immediate implementation, which will not require approval from the Argentine Congress.
Among them will be the prohibition of the Central Bank of the Argentine Republic (BCRA) issuing currency to finance the Treasury; eliminate tariff subsidies gradually, but in the short term, between January and April; not carry out public works, except those that have external financing; and freezing the values of contributions to universities, maintaining those practiced in 2023.
Clarín also reported that the plan foresees the release of fuel prices and the transformation of public companies into public limited companies, to facilitate privatizations.
Finally, the package establishes the devaluation of the peso and fixation of the commercial dollar at around 600 Argentine pesos, but which, with a 30% tax on the Tax for an Inclusive and Solidarity Argentina (PAIS), would be around 700 to 800 weights.
In practice, it would be an official value closer to the parallel dollar, the so-called blue dollar, which on Thursday (7) closed at around 990 pesos.
On Thursday, the current Minister of Economy, Sergio Massa, defeated by Milei in the second round of the presidential election, had announced a 5.9% devaluation in the official exchange rate, which took the dollar to 400 pesos.
It was the biggest devaluation of the Argentine currency since August 14, the day after the Argentine election, when a 22% depreciation was applied.
#Milei #prepares #plan #fiscal #adjustment #GDP #devaluation #peso