Economy Minister announces strong devaluation

The Milei government’s first economic package will have an immediate effect on Argentines’ pockets. The Minister of Economy, Luis Caputo, announced ten measures this Tuesday (12), two days after the new president took office. Caputo justified the measures by saying that Argentina would reach hyperinflation “if there was no reaction” from the country’s new administration.

He said that without new measures, milk, for example, would go from 400 pesos to 60,000 pesos in one year. Caputo’s list of measures includes a mega-devaluation of the peso – the national currency jumped from just under 350 pesos to 800 pesos at the official exchange rate. The minister also announced the reduction of subsidies for electricity, public transport and gas. With the decision, Argentines will start paying more for these services. He also announced the reduction in the number of ministries from 18 to nine and the suspension of tenders for new public works.

There are strong doubts, for example, about the value of public transport tickets and other services. The certainty, so far, is that inflation, which is already high, will rise even higher. Caputo said Argentines will be “for a few months worse than before.”

The International Monetary Fund (IMF), to which Argentina is indebted, praised the Milei government’s economic package.

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By adminn