New Argentinian government devalues national currency by more than 50 percent
Caputo also announced a reduction in subsidies for energy and transport. The state is keeping prices in these sectors artificially low through subsidies, said the minister. "But these subsidies are not free, we pay for them with inflation." Caputo warned: "If we continue as before, we are inevitably heading for hyperinflation."
The minister also announced that no more new public construction contracts should be awarded. Contracts that have already been awarded and whose project implementation has not yet begun should be canceled. Infrastructure projects should be funded by the private sector in future, said Caputo. In the case of public projects, the money would often end up "in the pockets of politicians" anyway.
In principle, the Argentinian state must overcome its "addiction" to spending more money than it takes in, said Caputo. Argentina had recorded a deficit in 113 of the past 123 years.
President Milei had announced painful austerity measures when he took office on Sunday. In view of empty state coffers, "shock therapy" was unavoidable, said the right-wing populist, ultra-liberal political newcomer. The 53-year-old is taking over the South American country in the midst of a severe economic crisis: inflation has risen to more than 140 percent and more than 40 percent of the population live in poverty.
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Source: www.stern.de
