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Argentine president cuts ministries, imposes new tax amid economic crisis

Xinhua | Updated: 2018-09-04 10:39
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Screen grab taken from a handout video released by Argentina's Presidency showing Argentina's President Mauricio Macri speaking to the nation during a televised message to announce austerity measures, including the elimination of government ministries and stiff taxes on exports to reduce budget deficits and stabilize the economy, in Buenos Aires on September 3, 2018. [Photo/VCG]

BUENOS AIRES - Argentina's President Mauricio Macri on Monday announced he was closing more than half of existing ministries in a bid to cut government spending amid a severe economic crisis.

He also unveiled a new tax on exports to raise government revenue.

"I have made the decision to reduce the number of ministries by more than half. Governments have different stages and at this stage I have decided to tighten up my team more to be able to better respond to what's coming," Macri said in a statement released early in the day.

Macri admitted the tax on exports was a "terrible" idea, but necessary given the "emergency situation."

"We are going to ask those who have greater capacity to contribute, the exporters, to contribute more," he said.

Argentina is struggling with high inflation and a steep devaluation that has seen the peso lose half its value since January.

His government recently secured a 50 billion US dollar loan from the International Monetary Fund (IMF) to ease the country's economic woes, but it appeared to have the opposite effect, eroding confidence in the economy and the currency. In August alone, the peso lost more than a third of its value.

Macri did not specify how his cabinet will look following this restructuring, but local media citing official sources said the existing 22 ministries will be whittled down to 10 by fusing some ministries and shuttering others.

Macri came to power promising to reform the economy and said he was confident that sticking to the reform program will eventually pay off.

To emerge from the crisis, Argentina has to "make progress towards public fiscal balance because we cannot spend more than what we have," he said.

The president has blamed the crisis on a variety of external factors, including rising oil prices, the US Federal Reserve raising interest rates and sparking capital flight, and a drought that impacted agriculture.

"The situation changed, in large part due to matters that are out of our control," said Macri.

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