A few hours after taking office, the new Argentine economy minister, Sergio Massa, announced this Wednesday a battery of measures aimed at lowering the fiscal deficit, capture foreign exchange through export incentives and international loans and thus try to stabilize a macroeconomy hit by severe imbalances.
(Also read: Argentina: Sergio Massa assumes as the new Minister of Economy)
“I am not ‘super nothing’, neither a magician nor a savior. I come to work in a very committed way to try to help Argentina do well,” said Massa at a press conference, who was sworn in this Wednesday as a new member of the Cabinet of the Government of President Alberto Fernández.
Massa called for all sectors to come together and work to resolve “the double face of Argentina, which grows at 6% per year and generates employment, but which has a huge lack of confidence in its currency, spending disorder, gaps in public investment and an enormous injustice in the distribution of income”.
I come to work in a very committed way to try to help Argentina do well
“We have to face inflation with determination because it is the biggest factory of poverty,” he said.
Massa said that the measures announced this Wednesday are not the only ones since he will adopt more resolutions in the coming days, all aimed at achieving fiscal order, trade surplus, strengthening of monetary reserves and development with social inclusion, supported by investment, production , exports and the defense of the domestic market.
This “roadmap,” he assured, seeks to “start down a path to a solution that is not magical, but that aims to attack inflation, loss of income, and the lack of macroeconomic and fiscal stability.”
(You may be interested in: Argentina: the plan of the new Minister of Economy in the face of a shortage of dollars)
tax order
In tax matters, Massa ratified that the goal established in the agreement signed in March with the International Monetary Fund (IMF) is maintained to reduce the primary deficit to 2.5% of GDP this year and said that it will make the “necessary corrections” to achieve it.
In addition, it decided to stop having monetary assistance from the Central Bank to the Treasury for the remainder of the year, ratified the decision to freeze hiring in the Public Administration and state companies and announced that savings in the use of public services will be promoted. among the 9 million households that requested to maintain the millionaire state subsidies for consumption.
Regarding the public debt in local currency placed in the domestic market, whose sustainability has been a factor of uncertainty in recent weeks, Massa said that a voluntary exchange of securities with maturities of up to 90 days has been launched and for which It has a committed adherence of 60%.
In terms of trade, he announced that there will be special regimes to promote exports of agribusiness, mining, hydrocarbons and the knowledge economy and financing for exports will be increased.
In addition, he anticipated that irregular import maneuvers will be investigated and that a foreign trade “traceability” system will be established for greater control and transparency in the use of foreign currency to pay for imports.
(Also: Argentina: opposition questions the election of Massa as Minister of Economy)
Strengthen reserves
Regarding the goal of strengthening Argentina’s monetary reserves, which currently stand at around 37.8 billion dollars, Massa announced agreements with the fishing, agriculture and mining sectors, which promised to liquidate exports in the next 60 days for 5,000 million dollars.
On the other hand, he said that he hopes to agree with international organizations on loans for 1,200 million dollars and anticipated that he will soon sign a disbursement of 750 million with CAF Development Bank of Latin America.
Likewise, he revealed that this same Wednesday he held a first “productive” meeting with representatives of the IMF to “face the challenges” that the announced measures imply.
(You can read: Inflation: An Argentine woman paid for lunch with a thick wad of bills)
Social assistance and income
On the other hand, Massa announced that there will be an audit of the social plans paid by the State to vulnerable sectors.
He also anticipated that there will be a bonus for retirees with reduced income due to high inflation -62% year-on-year in June- and announced that he will meet with unions and employers to establish a mechanism that allows recovering the income of the primary sector in the face of the escalation of the prices.
*With information from EFE
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