32475
Argentina Gets ‘Macri-Economic’ Shock
World Economy

Argentina Gets ‘Macri-Economic’ Shock

In just a week as Argentina’s president, conservative Mauricio Macri has passed drastic economic reforms, drawing praise from foreign investors but angry protests from citizens afraid for their salaries.
The so-called “Macri-economic” shock treatment in Latin America’s third-biggest economy saw the peso currency plunge by a third after he scrapped his leftist predecessor’s dollar exchange controls, AFP reported.
That was an even sharper fall than during Argentina’s financial crisis in 2002, when it had to be bailed out by the International Monetary Fund. Macri says a sharp adjustment is needed to make the country competitive, though economists as well as his political opponents warn it will hurt Argentines’ purchasing power in the medium-term.
But cheaper pesos mean ordinary Argentines will be able to buy less. Labor unions demanded the government give vouchers for workers at Christmas to compensate for having their spending power slashed by the currency reforms and by soaring inflation.
And small domestic producers have warned that freeing up exports and imports will drive them out of business. The currency reform was the most dramatic of Macri’s measures since taking office on Dec. 10. He has also axed a controversial tax on agricultural exports including grain and meat and lowered the tax on soybeans, another major export.
The freeing up of Argentine farmers’ stockpiles raised fears on world markets that they would be flooded with cheap Argentine produce. European grain prices fell after Macri’s announcement.
Argentina is the world’s third-biggest soybean producer but the protectionist policies of Macri’s predecessor Cristina Kirchner stifled exports.
Exporters welcomed the agriculture reform. Farmers called them a historic move that could lead them to sow 30% more wheat and corn next year.

Short URL : http://goo.gl/cK4AzQ
  1. http://goo.gl/X2bCEX
  • http://goo.gl/grsEhC
  • http://goo.gl/KHRZg7
  • http://goo.gl/Z0pQTJ
  • http://goo.gl/Pm9bDs

You can also read ...

Report says China’s economic development must rely on integration between innovation and industrial production,  and work must be done to ensure that innovation progress was passed on to production.
China's new economy will account for an estimated 12% of the...
The process of building a new government could take weeks, so markets may well move on from the result quickly.
Politics dominated trading on Monday, with the euro sliding as...
World countries are casting a shadow on the future of the global economic system.
Next month, when finance ministers and central bank governors...
EU Seeks Protection for Uber-Style Jobs
The European Commission said on Monday it wants more social...
The economy’s return to growth has eased pressure  on the authorities.
Now that Nigeria’s economy is recovering from its worst slump...
US to See Slower Growth
The pace of US economic growth will stay stuck in the low 2%...
One mining services company said it laid off more than 50 employees.
New laws and a crackdown on mining firms in Tanzania has...
Japan PM Announces $17.8b Economic Stimulus Package
Japanese Prime Minister Shinzo Abe said he would seek to...

Trending

Googleplus