Sergio Massa, Argentina’s Economy Minister, attributed the country’s 12.4% inflation rate in August to IMF policies, including the devaluation of the peso.
Massa spoke at a meeting in Buenos Aires. He announced an investment package of 4.8 billion pesos ($13.7 million) for industrial parks.
He said a strong peso and more exports could fight inflation. These steps would also help Argentina be free from IMF debt.
“Strong currency is our best tool against inflation. It also lets us repay the IMF and get it out of Argentina,” said Massa.
Yesterday, INDEC revealed August’s 12.4% inflation rate. This rate is the highest monthly level in 21 years.
Year-to-date, Argentina has seen an 80.2% rise in prices. The yearly inflation rate stands at 124.4%.
Background
Argentina has a long history of economic struggles, including defaults and high inflation. The IMF has often been involved in economic recovery plans.
But these plans are sometimes viewed as harsh and causing more harm.
Massa’s remarks are noteworthy as he’s also a presidential candidate. This could make IMF-related matters a central campaign issue.
His focus on a strong peso and exports is not new but is significant.
Argentina’s high inflation affects everyday people. Basic goods and groceries have become more expensive.
A high cost of living puts pressure on wage earners and could lead to social unrest.
Ties with the IMF are tense and have political implications. Previous deals with the IMF have led to austerity measures.
These cuts in public spending often lead to public protests.
A strong peso could attract foreign investment. But it could also make Argentine exports more expensive.
This is a tricky balance for any government to manage.