President Mauricio Macri says his coalition’s attempts to tackle inflation have so far “failed” because of the unexpected impact of increased utility and transports prices, rising international petrol prices and unexpected changes in the international economy.
“It was excessive”, Macri said of the inflation target of 15 percent that the government announced in late 2017. “It was the [former] Treasury minister’s conviction, no body asked for it”, he told star journalist Jorge Lanata on Sunday's Periodismo para todos, taking aim at former Treasurer Alfonso Pratt Gay.
“We needed a path toward lower inflation but nobody understands what it means to restructure public service costs and the impact these [changes] have on inflation.
“The prices we had before would have left us without an energy supply and they were taking us down the path of Venezuela”, the head of state said, referring to the multimillion-dollar subsidies his predecessor Cristina Fernández de Kirchner implemented on public services including transport, gas, electricity and water.
The president also defended his government’s decision to sign a deal with the International Monetary Fund (IMF) saying “gradualism is the way forward in caring for the most vulnerable”, however, “we must know look at less gradualism so that we do not deteriorate the world’s confidence”.
On Saturday, the government announced a second reshuffle in Macri’s economic team in as many days.
Juan José Aranguren, controversial for his connections to big business, will step aside from the Energy and Mining Ministry to give way to engineer Javier Iguacel; while Francisco “Pancho” Cabrera will be replaced by economist Dante Sica at the Production Ministry.
Macri praised both men saying “there are times when things must come to an end and some people become more worn out than others, despite the wonderful work they did”.
Aranguren “had to face the worst”, Macri said, referring to the winding back of subsidies on utilities and rising international petrol prices.
In a dramatic reshuffle, Finance Minister Luis Caputo was appointed as the new chief of the Central Bank on Thursday, replacing Federico Struzenegger, who resigned his post earlier that day.