At the beginning of the 20th century, Argentina
one of the richest countries in the world. After six major military coups and decades of reckless spending, the country is in turmoil and leftist President Alberto Fernández, who will step down on December 10, 2023, will be replaced by liberal economist Javier When Millais took office, inflation was expected to reach 211%. 45% of the population was poor.and argentina owe something $44 billion to the International Monetary Fund.
In South American countries, problems such as inflation have not yet been resolved.
reportedly Poverty now affects nearly every region, with the 12-month rate reaching 254.2% in January. 60% But investors are beginning to express newfound optimism about Argentina’s future.
“The market seems to be starting to believe,” said Mariano Saldans, a financial analyst at FDI Argentina.
Said Reuters.
This belief is fueled in part by the apparent effectiveness of Millay’s shock measures and his commitment to seeing them through.
Within a few hours after turning on the power,
self-proclaimed The “anarcho-capitalist” has brought his metaphorical “chainsaw” into half of Argentina’s government ministries.his government allowed the use of the peso currency devalue by 50%; and his Economy Minister Luis Caputo has made it clear that Argentina will be. reduce spending 3% of GDP.
In addition to reducing government spending,
progress In preparation for the dollarization of the currency, Milley’s government purchased and issued more than $5 billion in dollars to increase reserves. “Bopreal” bonds This is to deal with import debt. In its discussions with the IMF over Argentina’s debt, the Millais government has also insisted on pursuing more stringent fiscal measures than those deemed reasonable by the international body.
“The market is very optimistic about Javier Millay’s conviction,” Javier Casabal, fixed income strategist at AdCap Groupe Financiero in Buenos Aires, told Reuters. “Given that just a few weeks ago most investors lacked confidence in his ability to reduce the deficit, this is a real change worth celebrating. If anything, perhaps he has gone too far in some ways. Let’s go.”
Millay’s austerity measures have pushed Argentina’s risk index to its lowest level in two years, and some bonds to their highest level in four years. But Millay will likely need to overcome street protests, local protests and parliamentary setbacks if he is to successfully rebuild Argentina’s economy.
For example, Millais’s economic reform bill was as follows:
thwarted Congress passed the bill earlier this month, blocking Milley from privatizing various state agencies, overhauling myriad regulations and completely cutting state aid.
Reuters
report The oil-rich province of Chubut recently threatened to cut off the country’s energy supplies after the Milais government withheld about $16 million to repay some of Chubut’s outstanding federal debt, the sources said.
Adding to the bluster over austerity measures by parliamentarians and local leaders, left-wing groups are working to further paralyze the country. Late last month, Argentina’s largest labor union, the Confederation of Labor,
tidy They staged a 12-hour general strike to express their anger at saving this country from oblivion.
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