Argentina’s New Finance Minister Embraces Challenges and Uncertainties

RIO DE JANEIRO, BRAZIL – Hernán Lacunza, Argentina‘s new Treasury and Public Finance Minister, will have to steer the country’s economic agenda facing major challenges in the coming months. Among them is a fierce electoral campaign, the unclear international context and many adjustments to be made. Lacunza was received around 11 AM yesterday, August 19th, by President Mauricio Macri.

Last Saturday, August 17th, Treasury Minister Nicolás Dujovne resigned from his position, saying he was “convinced that, due to current circumstances, the administration needs a significant revival in the economic area.”

The task is now in the hands of Hernán Lacunza, who was Minister of Economy of the Province of Buenos Aires. Lacunza received an invitation from President Mauricio Macri to take up the post this weekend.

He heads the country’s most significant ministry, against a background of growing public debt, a difficult relationship with the International Monetary Fund (IMF) and an inflation rate that has already exceeded 22 percent in the first semester alone. Analysts believe that inflation, expected to stand between 50 and 55 percent by the end of the year, may increase further.

The relationship with the IMF, with which the country has made a number of commitments in exchange for a US$57 billion (R$228 billion) loan, will also need to be addressed. The terms agreed with the body will need to be renegotiated to reach new agreements and a consensus. IMF representatives are expected to visit the country within the next fifteen days.

What will happen to the dollar in the country remains to be seen. Last week, after the dollar soared by 25 percent (the currency surpassed sixty Argentine pesos) and the country’s risk exceeded 1,800 points (today it stands at 1,858 points), Macri announced measures to ease the pocketbooks of seventeen million Argentinians. As a result of these measures, analysts argue that the public deficit will also increase.

Hernán Lacunza is 49 years old and has a degree in economics. Before directing the Buenos Aires Ministry of Economy, he held the posts of director-general of the Argentine Central Bank and the Municipal Bank of the City of Buenos Aires.