Argentina’s minister of finance tells Senate he expects the economy to continue to contract until the end of the year and in 2019 by 0.5 percent.
Nicolas Dujovne presented a draft of next year’s budget to the Senate on Monday after it passed the House last week. The US$42.4 billion draft proposes to cut public education by 23 percent and health by eight. In total the Mauricio Macri administration wants to slash US$10 billion in health, education, science, transportation, public works, and culture to pay off the US$56.3 billion International Monetary Fund (IMF) loan negotiated by the administration over the past several months.
Dujovne said that 3.2 percent of the South American nation’s gross domestic product (GDP) will be used to pay for the loan’s interest. The finance minister promised the Senate the administration would not issue any more government bonds next year. The administration has sold off billions of pesos in short-term government bonds with interest rates between 40 and 74 percent. According to the treasury ministry, over US$800 million in dollar bonds were sold off just after the House approved the budget on Oct. 25, which will have to be repaid in April 2019.
Experts tell teleSUR that these international loans and paybacks are the main reason that Argentina is now experiencing a 40 percent interest rates and beef prices that, in one of South America’s highest meat-consuming countries, are up by 39 percent since the same time last year.
However, the minister tried to blame the current economic recession on alleged corruption charges among opposition parties, a drought and trade wars.
Trying to cover up the administration’s massive austerity measures since Macri entered office in 2015, including the elimination of at least five ministries last August, Dujovne pleaded with opposition senators to accept the budget claiming: "If we get involved in the past, the future passes us by” adding that not passing the budget bill would instill “uncertainty” in international investors.
Dujovne went as far as to say that if the austerity measures weren’t taken then Argentina “would have become Venezuela” trying to criticize the Nicolas Maduro administration and Argentina’s previous left-leaning presidents Nestor Kirchner and Cristina Fernandez.
Dujovne tried to convince members of the left-leaning that Fernandez leads that if these measures were
Senator Miguel Angel Mayans of the Front for Victory (FPV) that Senator Fernandez doesn’t believe this budget will fix the problem saying that an economic plan that continues to sell bonds with 75 percent interest rates is unsustainable.