Argentina takes action against inflation and currency devaluation

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 state aid”, declared on Instagram Mr. Massa, candidate of power in the presidential election scheduled for October 22 and third in the last primaries at the national level (27%). sound measurements “Programme to strengthen economic activity and wages” 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, IMF) since 2018 which in recent days has forced a devaluation of our currency and, in addition, a drought, the worst in our history, which has harmed our reserves and our accounts, but also affected the financial situation of many families”recalled the minister.

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.

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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 dollars, almost 3% of the national GDP.

In July, prices rose by 6.3% over one month, according to analysts, while inflation over one year reached 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.

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The World with AFP

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