Finance

Argentine finance minister sacked amid stubborn recession

Argentine finance minister sacked amid stubborn recession December 4, 2017Leave a comment
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BUENOS AIRES (Argentina): Argentine President Mauricio Macri sacked his finance minister Alfonso Prat-Gay on Monday, shaking up his economic team amid a stubborn recession who has made his center-right reforms deeply unpopular.

Prat-Gay’s ministry shall be split into two, said chief of staff Marcos Pena.

Nicolas Dujovne, a respected economist, will need over as finance minister. Luis Caputo, who previously served Prat-Gay as budget secretary, is going to take above the newly created budget ministry.

The president himself requested Prat-Gay’s resignation, Pena said.

“It’s just a few policy differences,” he told a press conference.
It\’s Macri’s first cabinet reshuffle since he swept to power more than last year, putting an emphatic end to 12 many years of left-wing rule.

Prat-Gay has been instrumental from a flurry of market-oriented reforms, for example the end of currency exchange controls — which caused the peso to reduce one-third of the value and sent annual inflation soaring above 40 percent.

Other reforms under his watch included the removal of subsidies for public transit, electricity and gas, which triggered angry protests.

Macri says the reforms should revive Latin America’s third-largest economy.

But when he starts his second year at work, the promised growth has yet to reach you.

The economy is forecast to contract by a couple of percent in 2010.
Seven in 10 Argentines come to mind in regards to the economy, along with an equal number think Macri “governs with the rich,” in line with an up to date poll.

More than 6,000 businesses have shut in 2010, in accordance with the Argentine chamber of commerce. As well as some 200,000 folk have lost their jobs, reported by consulting firm CEPA.

Clash with central bank

Prat-Gay had clashed with central bank chief Adolfo Sturzenegger, whom he previously lobbied to decrease the country’s key rate in a very bid to kick-start growth.

Sturzenegger, worried which would send inflation even higher, has refused.

The reshuffle was announced as Macri was on christmas inside the southern resort city of Villa La Angostura, within the Andes mountains.

But regardless of the odd Christmas holiday, what is the news came as the political earthquake way back in Buenos Aires, where speculation swirled on what it could shape economic policy.

Dujovne had publicly disagreed with Macri’s “shock” policy on slashing utility subsidies, arguing for the more gradual approach.

Pena, however, described him as “very valuable for his experience.”

Dujovne, who currently heads a financial consulting firm, was really a key player inside of a think tank called Fundacion Pensar (the Think Foundation) that helped get Macri elected during the past year.

A former chief economist at Argentine bank Galicia, he has got also worked to be a consultant for the World Bank.

Caputo was the government’s envoy for negotiations that ended a long-running legal battle between Argentina and US hedge funds demanding full repayment on defaulted Argentine bonds.

The settlement enabled Argentina to return to international capital markets after an exile more than a decade.

Caputo has played an essential role in increasing lending to Argentina after that, and one of his top missions, in the years ahead, is to “secure financing” for any struggling economy, Pena said.

Macri’s government is banking on growth and development of 3.5% in 2017, with inflation falling to 17%.

-AFP

 

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