Alfonso Prat Gay, Argentina’s Minister for the Economy reassured potential investors in Spain that their controversial new policies are supposed to reinvigorate the economy as they did there.
Argentinian Finance Minister Alfonso Prat Gay addressed the Spanish Foreign Minister and around a hundred CEOs.
In his speech he asked “Not only for pats in the back, but also investments” as economic openness resumes in Argentina.
Prat Gay justified the radical reforms that were introduced during the last 4 months, which resulted in a 300% increase in the price of public services and a 40% devaluation of the Argentinian Peso. He argues that these were measures taken to correct the problems stemming from the Kirchner administration, and compared them to those taken by Spain saying: "In Spain they took complex decisions and they are now the most vigorous economy in the region. That is exactly what we've been doing since December by order of the President”.
The Finance Minister assured potential investors that by the second half of 2016 inflation should be down to 1% per month, and that national income should be normalized claiming that “This is the time to root for Argentina”.
The adjustments have been radical, but they have to be, as fiscal deficit exceeds 7% of the Argentinian GDP, and under current conditions they will not be able to access international credit at reasonable rates.
Bonding new ties with Spain, should then be an effort towards this goal. Spain is Argentina’s second largest investor, and used to be the first before they nationalized the assets of Spanish energy giant Repsol.
“Argentina is coming back in the region and we will listen to Argentina with enormous attention.” Said Spanish Foreign Minister Jose Manuel Garcia-Margallo.
Argentinian president Mauricio Macri should benefit from this recognition then, as declarations such as that one will help rebuild trust in the Argentinian economy, and should serve as recommendations to other potential investors.
LatinAmerican Post |