Argentina: Reforms for Price Stability and GrowthThe experience of the last two decades indicates that without a permanent reduction in inflation, Argentine savings will not be invested in Argentina. But controlling inflation may not be sufficient. The Government as part of its comprehensive reform must remove price distortions and other policy interventions that have discouraged investment and job creation. A thorough stabilization must therefore be predicated upon mutually reenforcing reforms of the public sector, monetary policy, the exchange rate and external finance. Achieving these objectives could be obtained through various strategies. The key elements of each approach, however, must be the same: up-front fiscal reforms that include difficult-to-reverse structural measures, clear and transparent monetary and exchange rate rules, and an eventual accord with external creditors. It is believed that the work and sacrifice inplicit in an ambitious program of reforms would be rewarded with economic recovery and sustained growth. Finally, a sound program of consistant reforms could not only put people back to work, but create new jobs at a much higher rate than during the last decade. |
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adjustment agricultural Annex Figure Annex Table Argentina assets average balance BANADE Bank's benefits budget Buenos Aires capital Central Administration Central Bank Central Government commercial banks Compre Argentino cost current account demand deposits economic efficiency electricity employment energy exchange rate export tax external debt financial system fiscal deficit forced investments foreign Gross Domestic Product growth hyperinflation IBRD import improve income increase industrial promotion inflation tax interest payments labor liabilities loans macroeconomic measures medium-term million monetary base monetary policy monthly National natural gas nonfinancial public sector operations pension percent of GDP Plan Primavera private sector problem provincial banks provincial governments public banks public enterprises public sector deficit quarter of 1988 quasi-fiscal deficit real interest rates real prices rediscounts reduce regime requirements reserves savings social security system Source stabilization structural reforms subsidies tariff tax revenues taxation tion trade transfers