Implementation of the “Chainsaw Plan”
The country is at a crucial moment with the assumption of Javier Milei as president of Argentina. Milei has begun his mandate with the implementation of the so-called “Chainsaw Plan,” which is expected to include adjustments, devaluation, tax cuts and other economic measures. Although economic announcements were expected, these could be delayed by a few days due to “signature and appointment” issues.
The president has mentioned the need for adjustment and shock, as well as the promise of “light at the end of the road” and that the State will assume the costs, not the private ones. The plan is expected to include cuts, devaluation, measures to calm markets and other adjustments, although it is unclear to what extent it will impact the economy.
Expectations about the first measures
Economy Minister Luis Toto Caputo is expected to work on obtaining financing and coordinate with the Central Bank. He also mentions the imminence of a devaluation and the possibility of an exchange rate adjustment of at least 80% to reduce the exchange rate gap.
Fiscal adjustment and reduction of subsidies
Milei has promised a “hard immediate fiscal adjustment” that will aim to close the Central Bank’s monetary issuance, as well as the pruning of subsidies that will lead to an increase in public service rates. A rise in inflation and a possible reduction in social plans is also expected.
In summary, the beginning of Milei’s mandate is marked by the implementation of an economic plan that will include adjustments, devaluation, tax cuts and other measures that could significantly impact the Argentine economy. Specific announcements of these measures could take a few days.
With these perspectives, the country is awaiting the first actions of this new government, which could mark a significant course for the economy and the well-being of the population.
We hope that these measures bring stability and progress for Argentina, and we will be attentive to future developments that will set the course of the nation under the leadership of Javier Milei.