President Mauricio Macri said his country is facing "an emergency" that required massive spendings cuts and agricultural taxes. This year, Argentina's currency has already lost half its value compared to the US dollar.
Argentine President Mauricio Macri on Monday announced his government would implement new austerity measures aimed at stabilizing the country's economy.
"We must confront a fundamental problem: To not spend more than we have, to make efforts to balance the state's accounts," Macri said.
The measures include taxes, massive spending cuts and an export tax on primary exports, including agricultural goods.
"We know it's a bad, terrible tax that goes against what we want to foster: More exports to create more quality jobs," Macrci said. "It's an emergency."
Not all Argentines backed the IMF deal. Thousands took to the streets to protest the government's decision.
The center-right president came to power in 2015 on promises to cut taxes. On his first day in office, he announced sweeping cuts to agricultural taxes.
But economic woes have pushed down Argentina's currency, with the peso losing roughly 50 percent of its value to the US dollar since January.
Argentine Economy Minister Nicolas Dujovne said that fresh export taxes would give the government an additional $1.7 billion (€1.5 billion) this year and more than $7 billion (€6 billion) in 2019.
"In 2019, we want to reach primary fiscal equilibrium, and by lowering the deficit we will lower our need to issue debt," Dujovne said.
IMF wades in
The announcement comes before Dujovne heads to Washington for a meeting with the International Monetary Fund (IMF).
In June, the IMF agreed to loan Argentina $50 billion. The first tranche of $15 billion has largely gone to keeping the peso from collapsing.
During the trip, Dijovne is hoping to convince the IMF to speed up the disbursement of its loan. Last week, IMF official signaled their intention to help Argentina on the road to recovery.
"Argentina has the full support of the Fund and we are confident that the strong commitment and determination of the Argentine authorities will help the country overcome the current difficulties," said IMF spokesman Gerry Rice.
The Argentine president is hoping to prevent a repeat of the country's 2001 economic crisis, which dragged many citizens into poverty and triggered riots
ls/aw (AFP, Reuters)