Argentina recently announced a series of economic policies such as reducing energy and transportation subsidies and stopping bidding for new public works, in an attempt to reduce the fiscal deficit and control inflation. According to the Argentine state news agency on December 16**, in response to the new policy, 11 provinces in Argentina have declared an economic emergency and announced plans to cut public spending.
A number of Argentine governors from different political persuasions said they were aware of the "economic emergency" in Argentina at the national level, so they decided to cut public spending, according to Latin American television South. The governors also revealed that the local ** lacked funds and was not even enough to pay the salaries for December this year.
"Unfortunately, with great pain and anger, for the first time in more than 40 years, we will not be able to pay our December salaries at the end of the month, nor will we be able to pay the January of next year," said Claudio Poggi, governor of St. Louis. We will have to pay the money in two installments. ”
A state of economic emergency has been declared in the departments of Santiago del Estero, San Luis, Córdoba, Tucumán, Santa Fe, Catamarca, Tierra del Fuego, Chubut, San Juan, Neuquén and Entre Ríos, among the 23 departments of Argentina. There are also some provinces that have not taken measures for the time being, but have also issued warnings.
On December 13, in a supermarket in Buenos Aires, Argentina, customers were checking the goods** Source: Visual China.
The governor of Misiones, Hugo Passaluaqcua, said he did not plan to adjust fiscal spending, but he had instructed local governments to continue to manage resources responsibly and in an "orderly manner". Several ministers in the province of Buenos Aires revealed that Governor Axel Kicillof was "vigilant" about Argentina's new economic policies.
According to Southern TV, Argentina's new interior minister, Guillermo Francos, is expected to hold a meeting on December 19 local time, which will be attended by the governors of Argentina's 23 provinces and the mayor of the capital Buenos Aires. Argentine Javier Millet is likely to preside over the meeting himself.
Argentina's new ** Millet Source: Visual China.
In order to reduce the fiscal deficit and control inflation, Argentina has cut its 18 departments to 9. On December 12, Argentina's new economy minister, Luis Caputo, unveiled a series of economic policies, announcing a 54% reduction in the official exchange rate to 800 pesos per dollar, and plans to depreciate by another 2% every month in the future.
This was part of the first wave of measures in Milley's "shock**". According to the Associated Press, Milley hopes to reduce the competitiveness of Argentine goods abroad through currency depreciation, thereby improving the competitiveness of Argentine goods and narrowing the deficit. Such a measure could slow the flow of money out of Argentina and give the Argentine central bank an opportunity to replenish its foreign exchange reserves.
The new policy also includes measures such as cutting subsidies for energy and transport in Argentina** and halting tenders for new public works. Caputo said the policies would be "painful" in the short term, but the goal was to "address the fundamentals of the economy" and that "we just want to avoid disaster and get the economy back on track." ”
According to the Spanish newspaper El País, the depreciation of the peso soon led to a skyrocketing price increase in Argentina, which rose by as much as 100% 24 hours after the policy was released. According to the report, economists agree that the current situation in Argentina is serious and fiscal adjustment is necessary, but economists are still divided on what measures to take.
During his election campaign, Milley also proposed radical economic policies such as replacing the peso with the dollar. According to Argentina's Buenos Aires Economic News Network on December 15**, Caputo said in response to Milley's commitment to dollarization, "The goal remains the same, that is, to achieve dollarization." This is the goal of **, and he carried it with him in the election campaign. Without lying, I would like to clarify this because there must be a real pact with the population. ”
Milley's inauguration** comes at a time when Argentina is in the midst of a severe economic crisis. According to data released by the National Institute of Statistics and Census of Argentina on the 13th, Argentina's inflation rate reached 12 in November this year8%, and the cumulative inflation rate over the past 12 months increased to 1609%。Argentina is also facing a debt crisis, with a debt to the International Monetary Organization that already exceeds $44 billion.
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