The government will finance its budget by reducing its deficit or via private lending. " We have to confront inflation with determination." " Magic doesn’t exist," Massa exclaimed to reporters in Buenos Aires. The grey market 'blue dollar' for US dollars is trading dramatically weaker at around 300/USD. While the Peso's official spot price has weakened to over 130/USD.
The main reason for this is the government’s unsustainable spending, which has been funded in part by generous welfare programs,” Lorenzo explained. “The Argentine government has been grappling with a collapsing economy for some time now. Harry Lorenzo, chief finance officer of Income Based Research, told The Epoch Times the spending habits of Argentina’s government are at the root of the escalating problem. By comparison, national inflation was just over 14 percent in 2015. The country's deteriorating economic picture has left it cut off from international capital markets as the Fernández administration has relied on printing money to cover its chronic fiscal debt.Īs the Epoch Timesnoted earlier in the week, the country’s state funded programs extend to nearly every aspect of the economy, from wages to utilities, education, and health care.Īrgentina already spends an estimated 800 million pesos per day-a sum of more than US$6 million-on state benefit programs.Ĭoncurrently, inflation in the South American nation hit 58 percent in May and soared above 60 percent in July. Protests have erupted across the countryover the last several months, as citizens are demanding that their center-left government reinstate various subsidies, and reconsider cutting more - such as the country's notorious welfare program, which has grown to 22 million Argentinians receiving assistance amid a 43% unemployment rate.
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