YEREVAN (CoinChapter.com) — Argentina’s President Javier Milei, who took office on Dec. 10, 2023, has announced his government will take significant economic measures as part of his declared efforts to address the country’s deepening fiscal crisis. At the heart of these reforms is the devaluation of the Argentine peso by 54%, which will adjust the exchange rate to 800 Argentine Pesos per US dollar. This development is a substantial shift from the current rate of around 365 pesos per dollar.
Javier Milei to Push for Economic Reforms
In addition to devaluing the peso, President Milei will introduce a series of spending cuts. Steps in this direction will include reducing the number of ministries, cutting down discretionary transfers to provinces, and halting public work tenders.
Moreover, the Milei administration plans to cut subsidies in the energy and transport sectors. Considering that some of these measures may impact the most vulnerable sections of Argentinian society, the government will double social spending for the poorest segments of the population.
These economic reforms have become necessary in the country. In Argentina, inflation has nearly reached 150%, devastatingly impacting the economy. A large chunk of the population, over 40%, lives in poverty.
IMF Welcomes President Milei’s Economic Reforms
In addition to the ongoing inflation, the country is also reeling under a $44 billion loan from the International Monetary Fund (IMF).
The IMF welcomed President Milei’s “bold initial actions.” According to the agency, these steps will stabilize the economy. Moreover, they will help lay the foundation for sustainable growth led by the private sector.
“IMF staff welcome the measures announced earlier today by Argentina’s new Economy Minister Luis Caputo. These bold initial actions aim to significantly improve public finances in a manner that protects the most vulnerable in society and strengthens the foreign exchange regime. Their decisive implementation will help stabilize the economy and set the basis for more sustainable and private-sector led growth,”
IMF Communications Director Julie Kozack said in a statement.
Argentina’s President Keeping His Promise
President Milei, a libertarian, won the race to become the President of Argentina during the highly-watched elections last month. He defeated the country’s Economy Minister Sergio Massa, grabbing over 55% of the votes.
Milei is an ardent Bitcoin (BTC) supporter. He has previously slammed the established financial system that has brought high inflation to Argentina.
“We have to understand that the central bank is a scam. What bitcoin is representing, is the return of money to its original creator, the private sector,”
he said in an interview with Clarín, the largest newspaper in Argentina.
Having won the election, he is now out to deliver on his election promises. He had told citizens he would implement major spending cuts, including reducing the state’s size.
While his election has raised eyebrows across the globe, citizens are hopeful he can fix the economy. However, the country’s fragile economic and political situation will not be easy. However, if he succeeds in reducing the deficit, he may hope for a second term.
