To stabilize its shaky economy, Argentina's President Mauricio Macri has announced new taxes on exports and the elimination of several government ministries.
The political moves come as the country’s currency, the peso, hit record lows.
President Macri said in a televised address that he will also allocate more economic aid and strengthen food plans for Argentines who suffer from poverty and have been affected by skyrocketing inflation running at more than 30% this year.
"To start building the country we want, we have to balance our accounts with a state that spends less than what it receives," he said on TV Monday night. In recent weeks, the currency crisis in Argentina has intensified, forcing the government to ask for the early release of a credit line from the International Monetary Fund under a $50-billion U.S. backup financing arrangement.
President Macri, a pro-business conservative who took office in 2015, promised to trim Argentina's fiscal deficit, reduce poverty and curb inflation, but has struggled under the weight of the country's economic problems. The latest moves come as he seeks to calm markets and restore confidence to Argentines who continue to lose purchasing power.
The peso closed Friday at 37.4 pesos per U.S. dollar and tumbled an additional 4% to 39.3 pesos per dollar after the president spoke, suggesting the announcement had done little to reassure investors. The government will now undertake what it calls a "deficit zero" plan intended to balance the budget in 2019 and staunch the currency's steep devaluation.
Argentina's Economy Minister Nicolas Dujovne said that a tax of four pesos (10 cents U.S.) would be levied for each dollar of primary exports and services, and an additional tax of three pesos (seven cents U.S.) would be put on all other exports from the country.
President Macri announced that the number of government ministries will be reduced by nearly half, although no additional details were immediately available. Many Argentines have reacted with disdain to President Macri's arrangement with the IMF, blaming the body for its role in the country's record debt default of more than $100 billion U.S. in December 2001.
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