NATIONAL INTELLIGENCE DAILY THURSDAY 18 AUGUST 1983 - 1983/08/18

• Document Type: SPECIALCOLLECTION
• Collection: Argentina Declassification Project - The "Dirty War" (1976-83)
• Document Number (FOIA) /ESDN (CREST): 05144141
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 19
• Document Creation Date: April 3, 2019
• Document Release Date: April 12, 2019
• Publication Date: August 18, 1983

3.5(c)
Approved for Release: 2018/10/02 C05144141
Director of
Central
Intelligence
3.5(c)
Th0et
National Intelligence Daily
Thursday
18 August 1983
Approved for Release: 2018/10/02 C05144141
TerrS
CPAS NID 831 94JX
18 August 1983
Copy 285
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Contents
lap-secai
Argentina: Economic Moves
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ARGENTINA: Economic Moves
Government leaders leaders have taken steps to preserve economic order
through the elections scheduled for October, but the _policy measures
will heighten problems for the next administration. 3.5(c)
Argentina's financial package came close to unraveling this week
because of the junta's reluctance to lift foreign exchange controls on
British firms in the country. Once the government agreed to meet loan
criteria, however, the IMF approved Buenos Aires's second draw on
loan funds. 3.5(c)
The leadership also approved a new set of economic measures
designed to curb the inflation rate, which is now over 300 percent
annually. The measures include restraints on wage, price, and interest
rate hikes as well as on new government investment. A steep
surcharge was placed on income taxes, 11acate industrialists,
the value-added tax was slightly reduced 3.5(c)
Nationalists have called the lifting of sanctions against the UK a
sellout. Labor leaders have complained that the p will not do
enough to maintain the workers' standard of living 3.5(c)
Comment: Reconciliation with the IMF has paved the way for new
funds necessary to sustain the recovery program. In addition, bankers
shoul be willing to reschedule Buenos Aires's large short-term
debt. 3.5(c)
The next government, however, will pay a price for these fleeting
gains. Although price controls will repress inflation rates for now, the
market distortions they create will set the stage for substantial jumps
later in the year. Interest rate ceilings and reduction in the value-
added tax also will work to restrain near-term inflation, but they will
discourage savings and spur capital flight. 3.5(c)
Moreover, the tax package will not prevent higher deficits. This
will add to the inflationary pressures that will be one of the early
challenges facing the civilian administration. Labor will put pressure
on the new government to allow wage increases.
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