New Argentine Leader Makes Big Changes to Economy
Recently elected Argentine leader Mauricio Macri is making good on his promise to revamp his country’s flailing economy.
Since taking office on Dec. 10, Macri has lifted the currency controls, which led to the devaluation of the Argentine peso.
After Macri lifted the controls, the peso exchange rate fell to 13.3 to the dollar from the central bank’s official score of 9.8.
As CNN reports, Argentina’s new finance minister, Alfonso Prat-Gay, described Macri’s move as a basic one.
"This is how a normal economy functions in any part of the world," Prat-Gay said.
As reported in The Wall Street Journal, the new finance minister remarked that the lifting of currency controls allows for the benefits of a more laissez-faire situation.
“He who wants to import will be able to do so, and he who wants to buy dollars will be able to buy them,” Prat-Gay added.
Macri has also cut personal income taxes and lifted taxes on exports in an effort to stimulate trade and spending. His administration plans to negotiate with creditors who have purchased Argentina's defaulted debt over the years.
Neil Shearing, a market economist at the research firm Capital Economics, sees Macri’s efforts as positive.
"It's still early days, but Mr. Macri has made a good start to his term in office," Shearing said, according to CNN.
Whatever happens with Argentina’s economy, the immediate plans are certainly different from what Macri’s left-leaning opponent, Daniel Scioli, had in store for the country.
Speaking to the Economist just prior to the election, Scioli said he felt the county was stable and doing fine.
The candidate saw the differences between him and Macri as fundamentally based on ideologies regarding the market.
“He believes that the market takes care of everything,” Scioli said. “I believe more in the role of state.”
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