Argentines Anxiously Await Details of New Austerity Plan
Aug. 02, 1988
BUENOS AIRES, Argentina (AP) _ Banks and exchange houses closed Monday in the first of two government- ordere d bank holidays, but Argentines were kept in suspense about economic measures being prepared.
The president of the Union of Argentine Commercial Businesses, Alberto Arrojo, said the pending changes seem like ''another attempt to transfer resources from the private sector to the public sector.''
The General Federation of Labor, which claims 3 million members, called off a meeting with Rodolfo Terragno, minister of public works and services, pending a briefing on the plan.
In Congress, an opposition Peronist Party deputy, Jorge Matzkin, complained his party was not consulted on the reforms, and he demanded a ''detailed report'' on negotiations with the International Monetary Fund regarding Argentina's $55 billion foreign debt.
On Sunday, the Central Bank announced banks and exchange houses would be closed Monday and Tuesday while the government put the finishing touches on a new, anti-inflationary economic package. No details were disclosed.
On Monday, President Raul Alfonsin met with Economy Minister Juan Sourrouille, Central Bank President Jose Machinea and Treasury Secretary Mario Brodersohn. Machinea and Brodersohn returned Sunday from Washington, where they reportedly negotiated a $1.2 billion stand-by loan from the IMF.
Reportedly under consideration are wage and price controls, major hikes in bus fares and other public services, taxes on exports, devaluation of the austral, Argentina's currency, and other measures aimed at curtailing triple- digit inflation.
The inflation rate stood at 121.2 percent over the past six months, and 321.7 percent over the past 12 months. The cost of living rose 18 percent in June; the July rise has been anticipated at more than 20 percent.
The economic overhaul will be Alfonsin's second since the civilian president replaced a military government in December 1983. In June 1985, with annual inflation at more than 1,000 percent, he imposed a wage and price freeze, placed a cap on government employment and replaced the peso with the austral.
In 1986, the inflation rate in the nation of 31 million dropped to its lowest rate in the 1980s when it hit 82 percent.
Last year, however, the rate was 175 percent.