Luis Caputo announced new economic measures to avoid “hyperinflation”

The Minister of Economy, Luis Caputo, announced a package of economic measures to be implemented with the inauguration of the new government, which seek to avoid a “hyperinflation” that could lead to a “catastrophe.” We are facing the worst legacy in our history,” Caputo began by saying in the recorded video that was released by the government. Then he added: “If we continue as we are, we are inevitably on the road to hyperinflation. We can reach levels of 15000% per year. A milk will go from being worth $400 to $60,000 in the span of a year.” In this sense, he states that the government’s mission is to “avoid this catastrophe.” In addition, he referred to the fiscal deficit, explaining that this happens when “more is spent than collected,” and that Argentina “has been addicted to the fiscal deficit” in recent years. Therefore, to solve the current crisis situation, the minister announced a series of 10 measures: 1. State labor contracts that are not more than one year old are not renewed”A common practice in politics is to incorporate family and friends before the end of a term of office,” Caputo said.2. Suspension of the national guideline for one year “There is no money for expenses,” he said. Minimizing discretionary transfers to the provincesIn this regard, he remarked: “These are resources that, unfortunately, in our recent history have been used as bargaining chips to exchange political favors.” Ministries will be reduced from 18 to 9 and secretariats from 106 to 54. “This will result in a reduction of more than 50% of the hierarchical positions in politics and 34% of the total political positions of the National State,” Caputo said. The national government will not tender any more new public works, and it will cancel those that have not begun. The measure aims to ensure that the works will be carried out by private companies.6. Subsidies to energy and transportation rates will be reducedCaputo said: “Today the state artificially sustains very low prices in energy and transportation rates through these subsidies. Politics has always done it because that’s how they deceive people into thinking they’re putting money in their pockets. But as all Argentines will have already realized, these subsidies are not free, but are paid for with inflation. What they give you in the price of the ticket they charge you with the increases in the supermarket.”7. The Empower Work plans will be maintained according to the 2023 BudgetIn this regard, it was announced that it will be strengthened for those who need it, such as the Universal Child Allowance and the Food Card.8. The official exchange rate will be $800 With this, the PAIS tax on imports and withholdings on non-agricultural exports will rise. The official said: “We benefit exporters with a better price and equalize the tax burden for all sectors, no longer discriminating against the agricultural sector.” The SIRA import system will be replaced by a statistical and information system that will not require the approval of licenses. Whoever wants to import, can do so and that’s it,” he said. The Universal Child Allowance plan will be doubled and the Food Card will be doubled by 50%The official pointed out that it is necessary to “complement these measures of an important social nature”. In addition, the minister said during his statement that the objective they have as a government is “to solve the problem at its root, precisely so that we no longer have to suffer those consequences. So as not to suffer from inflation and poverty.” This represents an opportunity for everyone. It is the first time in more than 100 years that a candidate has come to power who explains this, that the people understand it and vote for it by a majority (…) People today understand that there is no money.” Finally, Caputo noted: “We are inheriting pent-up inflation that is being uncovered. We’re going to be worse off for a few months than before, in terms of inflation.”

Original source in Spanish