New Argentine government announces tax hikes

Argentina's new leftist government announced Tuesday a 30 percent tax on foreign currency purchases and a six-month freeze on public utility prices as part of a raft of measures to boost growth.

The government of President Alberto Fernandez, who took office last week, already announced increases in taxes on agricultural exports over the weekend.

The measures announced by Economy Minister Martin Guzman on Tuesday is aimed at boosting spending with a focus on social programs in the hope of reviving domestic consumption and restricting dollar outflows.

"In 2017, a reform was enacted for an economy that was going to grow and instead went into freefall," Guzman told a press conference in Buenos Aires.

"If we want to solve the crisis we have to change that. If not, our fiscal problems are going to get worse," he said. "We cannot allow the deficit to grow."

The 30 percent tax on foreign currency purchases will include those made with credit cards.

Guzman also announced a rise in rates of personal property taxes.

"This set of measures seeks to maintain certain balances, and change priorities to protect sectors that are highly vulnerable," the minister said.

He announced a bonus of 160 dollars for pensioners, to be paid in two tranches in December and January.

"This is about stopping the Argentine economy from falling while we protect those we can't ask more from," said Guzman.

Argentina's economy is expected to shrink by around 3.1 percent in 2019, as inflation hovers around 55 percent, poverty near 40 percent and unemployment rising to 10.5 percent.