Argentina's Economy Minister, Luis Caputo, announced on Tuesday night (12) the first economic measures of the Javier Milei government.
Initially, the measures would be announced on Monday (11), the day after Milei took office, but the announcement was postponed until this Tuesday.
Even so, the announcement, made in a video recorded by Caputo and published on Milei's YouTube channel, was postponed throughout the day: initially scheduled for 5 pm (local time, the same as Brasília), it occurred only after 19 hours.
The measures announced were:
- Government employment contracts valid for less than one year will not be renewed
- Suspension of government advertising for one year
- Reduction of ministries from 18 to nine and secretariats from 106 to 54
- Reduce transfers to Argentine provinces “to the minimum” possible
- No tenders will be launched for new public works and those approved for which development has not yet begun will be cancelled.
- Reduction of energy and transport subsidies
- Maintenance of the Potencializar Trabalho, Universal Child Benefit and food card programs, with the second being expanded and the third being readjusted by 50%
- Set the official exchange rate at 800 Argentine pesos (today, it is around 400 pesos), with a provisional increase in the Tax for an Inclusive and Solidarity Argentina (Countries) on imports and retentions on non-agricultural exports
- Replacement of the Import System of the Argentine Republic (Sira) with a statistical and information system that will not require prior approval of licenses.
“If we continue as we are, we will inevitably head towards hyperinflation,” said Caputo.
“The genesis of our problem has always been the fiscal deficit. Politically, we have always been deficit addicts. What we came to do is the opposite of what has always been done. We came to solve this problem at its root”, stated the minister.
Caputo warned, however, that the measures will take time to take effect, due to the economic chaos inherited by the new administration.
“For a few months we will be worse than before, particularly in terms of inflation. I say this because, as the president says, it is better to tell an uncomfortable truth than a comfortable lie,” said Caputo.
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