Argentina's Javier Milei administration said Tuesday that 5,000 government employees, who were hired this year before the former took office, will be fired.
The announcement was made as a part of cutbacks and devaluation declared after Milei came to power on Dec. 10 with a promise to end the country's economic struggles, including inflation.
According to the authorities, the contracts of employees, who were hired before 2023, will be renewed.
The inflation in the country is expected to reach 200% and the president has vowed to reduce the same with the help of government reforms and payrolls, while allowing private sectors to run state-owned industries in order to increase investment and exports.
"The goal is (to) start on the road to rebuilding our country, return freedom and autonomy to individuals and start to transform the enormous amount of regulations that have blocked, stalled and stopped economic growth," the president said, AP News reported.
This move came one week after Milei signed a decree outlining economic reforms, including an end to export limits and new measures to ease regulations as the country fights an economic crisis.
The initiatives include easing government regulations and privatization of state-owned companies. Though the president didn't mention the names of any firms, he had previously supported the privatization of the state-run petroleum refinery YPF.
Argentina's central bank said last week that it will change its benchmark interest rate from the previous 28-day LELIQ rate of 133% to the overnight reverse repo rate of 100%. Roberto Geretto, an economist at Fund Corp, believes these changes will help reduce the fiscal deficit by pushing banks and savers to invest in treasury bills.
Argentina, the second-largest economy in South America, continues to face high inflation with an annual rate of 143%. The country has a history of instability due to inflation, fiscal deficits and currency devaluation.
Milei eased government regulations and announced the privatization of state-owned companies after thousands of people protested on the streets of Buenos Aires over the devaluation of the local currency, the peso, and cuts to energy and transportation subsidies.
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