Hours after Argentina's new Minister of Economy Sergio Massa was sworn into office, he pledged to stop printing money in an attempt to halt a spiraling currency crisis that has seen inflation hit 60% - and has been projected to reach 90% by the end of this year.
According to the Buenos Aires Times, Massa's economic roadmap also focuses on boosting exports, reducing the country's fiscal deficit, and refilling the central bank's severely depleted reserves.
Protests have erupted across the country over 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.
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.
As the Epoch Times noted 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.
Argentina already spends an estimated 800 million pesos per day—a sum of more than US$6 million—on state benefit programs.
Concurrently, inflation in the South American nation hit 58 percent in May and soared above 60 percent in July. By comparison, national inflation was just over 14 percent in 2015.
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.
“The Argentine government has been grappling with a collapsing economy for some time now. The main reason for this is the government’s unsustainable spending, which has been funded in part by generous welfare programs,” Lorenzo explained.
While the Peso's official spot price has weakened to over 130/USD...
The grey market 'blue dollar' for US dollars is trading dramatically weaker at around 300/USD...