Argentina unveils ‘emergency’ austerity measures, grain export taxes

BUENOS AIRES, (Reuters) - Argentine President Mauricio Macri yesterday announced new taxes on exports in the world’s third-biggest soy producer and steep cuts to spending in an “emergency” bid to balance next year’s budget, as his center-right government aims to persuade the IMF to speed up a $50 billion loan program.

The new austerity measures, announced by Macri and Finance Minister Nicolas Dujovne, were prompted by a 16-percent slide in the peso last week that brought its losses to almost 50 percent against the dollar this year.

The peso closed 3.14 percent weaker after the new measures were announced on Monday, a U.S. holiday. Some analysts warned it could slip further in coming days as the focus turns to Washington, where Dujovne will start talks on Tuesday with International Monetary Fund officials about accelerating disbursements from the loan deal, agreed in June.

Macri said that far-reaching measures to balance the budget were the only way to draw a line under repeated bouts of financial turmoil over decades in Argentina.

“This is not just another crisis. It has to be the last,” Macri said in a televised national address.

Spending cuts will make up about half of savings needed to balance the budget next year, a year earlier than planned, said Dujovne.

Almost all new revenues will be funded with an export tax of 4 pesos per dollar on exports of primary products, including agricultural goods, and 3 pesos per dollar on other exports, he said.