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Thursday July 25, 2024

Milei’s economic reforms take effect in Argentina

By News Desk
July 10, 2024
Argentine President Javier Melei waves to supporters outside the Casa Rosada after his swearing-in ceremony in Buenos Aires on December 10, 2023. — Reuters
Argentine President Javier Melei waves to supporters outside the Casa Rosada after his swearing-in ceremony in Buenos Aires on December 10, 2023. — Reuters

BUENOS AIRES: Argentine President Javier Milei’s flagship economic reforms kicked in Monday, ushering in privatizations, relaxed labor protections and incentives to boost investment in a country battling decades of decline.

The package of reforms was enacted after months of debate and violent protests against the bill, amid a punishing recession and harsh austerity measures that have hit Argentines hard.

The self-declared ‘anarcho-capitalist’ president now has the green light to declare a one-year state of economic emergency, disband federal agencies and privatize about a dozen public companies.

Other measures deal with weakening labor protections -- slammed by left-wing opponents as a license to fire workers.The provisions also envision tax, customs and foreign exchange incentives to encourage investment in the country wracked by economic crisis.

Milei’s government has applied a drastic, all-out fiscal austerity program, with the aim of achieving ‘zero budget deficit’ by the end of 2024 to tame chronic inflation.But budget cuts, including the paralysis of public works, coupled with a brutal devaluation of the peso by more than half in December, have strangled purchasing power.

The International Monetary Fund expects Argentina’s economy to contract by 3.5 per cent this year.A fiery outsider, Milei took office in December after sweeping to power on a wave of deep discontent with traditional parties unable to curb government spending and soaring inflation.Monthly inflation is now at its lowest point in two-and-a-half years, driven by a drop in consumption as the economy slumps.