Argentina has imposed new taxes on exports in addition to announcing a string of austerity measures in a desperate attempt to halt the economic crisis stemming from a currency crash and hyperinflation.
In a televised address, President Mauricio Macri has promised financial aid for people in extreme poverty to help them cope with the crisis.
Macri said he chose to tax exporters because they “have more capacity to contribute” and have benefited from the plummeting value of the currency peso.
The South American country is also going to disband several ministries to cut expenses. “To start building the country we want, we have to balance our accounts with a state that spends less than what it receives,” said Macri.
The president has also urged the International Monetary Fund (IMF) to hasten the release of US$50 billion credit line that it approved earlier this year.
It is not clear which ministries will be closed, but, according to Argentine press, the treasury department is first on the chopping block.
Macri, a pro-business conservative who took office in 2015, has made a genuine attempt to reverse his country’s economic fortune, but rising interest rates in the United States have plunged the peso into crisis, leaving him with no option but to ask for more loans from international banks.
Rising oil prices and hyperinflation are today adding fuel to the fire. With stock markets diminishing day after day, investors are pulling the US dollar out of Argentina.
To make the matter more complicated, opposition party supporters are marching through the streets in large cities, urging the government not to borrow from the IMF.