Argentina is considering changes to its tax and social security structures as part of a plan to address economic imbalances, Economy Minister Martín Guzmán told a group of investors last week.
The government is considering reforms in the context of ongoing talks for a new financing programme with the International Monetary Fund, Guzmán reportedly told a group of overseas bondholders in a call on October 16, according to people who participated in the call and requested anonymity to speak.
Guzmán added that changes were needed to create investment incentives and that the government would seek to increase flows in the parallel foreign exchange market known as the CCL (contado con liquidación) exchange market. Argentina will also hold talks with other multilateral lenders to seek additional financing next year, one of the people said.
Despite the recent successful restructuring of US$65 billion in foreign debt, Argentina's economy so far has not lived up to investors' expectations for a road to recovery. GDP is expected to contract by a record 12 percent this year. The economy is entering its third year of recession and the gap between the country's official and unofficial exchange rate has reached a 31-year high.
The Economy Ministry did not immediately respond to a request for comment.
The government has been updating pension payments through presidential decrees after suspending the implementation of an existing pension law. The Alberto Fernández administration has also taken some steps to reform its existing tax system through a bill sent to Congress on October 16 that aims to introduce changes to taxes on income and personal assets.
by Jorgelina do Rosario, Ignacio Olivera Doll & Scott Squires, Bloomberg