Strengthening the Adjustment and Holding Firm Against the Dollar

The recent economic decisions made by Luis Caputo, the Minister of Economy and Finance in Argentina, have been met with mixed reactions. While some believe that the decision to eliminate subsidies for urban transportation in the provinces was a bold move towards achieving financial stability, others argue that it could harm lower-income households.

After withdrawing the Omnibus bill from Congress due to political opposition, Caputo focused on communicating the need for adjustments to public accounts in order to achieve a financial surplus. Despite initial stock market fluctuations and concerns about inflation rates, economists say that there has been some moderation in price increases since Milei’s decision. However, they also predict an expected increase of around 18% in the cost of living this month.

The new stage of economic adjustment is characterized by significant cuts in pensions, salaries, and fixed-term deposits in pesos. This is due to a sharp drop in sales since the beginning of the year as a result of the price stampede following December’s devaluation. Discounts of up to 70% are being offered on second units in supermarkets and retirees are receiving special discounts. The impact on families has been significant, and there are concerns about how much recession will be necessary to lower inflation rates.

There are different views on how to approach economic policy moving forward. Some advocate for maintaining fixed exchange rate policies and deepening dollar usage as an anchor currency to moderate price increases. Others argue for more drastic measures such as increasing taxes or implementing austerity programs. The content related to health is unrelated and irrelevant to this topic, making it difficult to rewrite this paragraph effectively.

Overall, Caputo’s decisions have sparked debate about the best course of action for Argentina’s economy moving forward. While some see these adjustments as necessary steps towards achieving financial stability, others fear they may lead to further hardship for already struggling households.

In conclusion, Luis Caputo’s decisions regarding subsidies for urban transportation and other economic adjustments have faced criticism from various quarters due to its potential impact on lower-income households while aiming at reaching a financial surplus objective despite facing political costs. The current economic cycle generated by sharp drops in sales has put pressure on families with rising costs expected this month around 18%. There are different opinions on how best policies should be implemented moving forward; however, some experts suggest keeping fixed exchange rate policy while deepening dollar usage as an anchor currency modifying prices increase.

Caputo believes that he is able to act freely within his role thanks to President Macri’s support but there is no consensus yet about whether he will succeed or not

By Editor

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