Buenos Aires (AFP)

The Argentine government must promulgate on Monday a series of emergency economic and fiscal measures intended to put back on track the economy of a country in "virtual default" and plunged into a crisis similar to that of 2001, according to the new President Alberto Fernandez.

"The promulgation will take place today," the chief of staff to the head of state, Santiago Cafiero, told the press on Monday when he entered the presidential palace of Casa Rosada.

The law's publication in the Official Gazette was expected in the morning Monday, after being approved by Parliament during two marathon sessions on Saturday. But an element regarding corporate taxation required modification, according to government sources.

The economic emergency law provides, among other things, for higher taxes for the middle and upper classes, social benefits for the most disadvantaged, and a 30% tax on purchases and other expenses in foreign currency, in a country where many locals are used to saving in dollars to cope with currency devaluations and inflation.

With this new law, the government hopes to "meet the needs of the most vulnerable sectors and focus all its efforts on boosting demand and boosting growth," said Alejandro Vanoli, director of the government’s social security agency, on Monday ( ANSES), responsible for social security, pensions and aid for disadvantaged people.

"The state is concentrating all its efforts on those who suffer the most from the social situation," he insisted.

The law provides in particular for a "plan against hunger", as well as the granting of bonuses for small pensions and, for the poorest, the postponement or the freezing of the increases of the tariffs of the public services.

- Similar to 2001 -

Former center-right president Mauricio Macri leaves a country plagued by recession and inflation. The Argentine peso has fallen by 70% since January 2018. At the end of August, it had asked for debt rescheduling, notably with the International Monetary Fund (IMF) which granted Argentina a loan of 57 billion dollars in 2018 against a austerity program. The country has so far received 44 billion

The new president, a center-left Peronist, said when he took office on December 10 that he had inherited a "dramatic situation".

"It is not the same as in 2001, but yes it looks like it," the head of state said in an interview on America TV on Sunday. In 2001, Argentina declared itself in default for $ 100 billion.

"At that time we had a 57% poverty rate, today 41%. We had a debt on which we were defaulting, today it is a virtual default," he repeated. .

The country recorded a 3.1% drop in GDP in 2019 and 55% inflation, one of the highest in the world.

"This is what we inherit. We cannot face and pay the obligations that fall," deplored Mr. Fernandez.

Friday, Buenos Aires had deferred in August the repayment of 9 billion dollars of debt denominated in dollars. The rating agencies Standard and Poor's and Fitch then lowered the rating assigned to Argentina to "RD" ("selective default").

In the vocabulary of rating agencies, "selective default" refers to the situation of a borrower who has not honored a certain part of his obligations or a specific issue, but who continues to pay his other types of loans in time. It is the penultimate note of the scale before the outright default ("D").

Public debt amounts to some $ 330 billion, or almost 90% of GDP, including $ 44 billion to the IMF. In 2016, at the start of Mauricio Macri's mandate, it amounted to 20% of GDP.

In 2001, the country, unable to meet its debt repayment deadlines, had experienced the biggest default in history and a serious economic and social crisis that had traumatized Argentines and the financial markets.

© 2019 AFP