YPF - Argentina's Milei gets the ball rolling on his privatization drive
2023-12-21 04:16:37 ET
Argentina's newly-elected President Javier Milei has announced sweeping reforms to boost the economy, including scrapping laws that prevent the privatization of state-run companies and those that regulate rent.
"The goal is 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 in our country," Milei said.
The president aims to privatize national airline Aerolineas Argentinas, state-owned rail networks, state media companies, and Argentine Water and Sanitation (AySA). He will also target state-run oil company YPF ( YPF ) and energy firm Enarsa after a transition period.
However, these measures are expected to face pushback in Argentina's Congress, where Milei's party is a minority. Before being implemented, the reforms need to be reviewed by lawmakers in both chambers of the legislature.
The reforms were announced just hours after Argentines began protests against Milei's shock measures last week, which included the devaluation of Argentina's peso by over 50% as well as major cuts to energy and transportation subsidies.
Economy Minister Luis Caputo said the tough measures, which were endorsed by the International Monetary Fund, were necessary to cut Argentina's surging fiscal deficit. The country also has a $43B trade deficit and $45B debt owed to the IMF.
Argentina has been struggling with sky-high inflation, with the annual inflation rate reaching 161% in November - the highest this year.
The S&P MERVAL Index ( MERVAL ), Argentina's benchmark index, had ended 0.6% higher on Wednesday.
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Argentina's Milei gets the ball rolling on his privatization drive