Economy Minister Luis Caputo articulated a robust defence of the government’s economic program on Tuesday during the inaugural session of the annual Conference of the Argentine Industrial Union (UIA, in Spanish), set against the backdrop of a significant decline in the nation’s manufacturing sector. During a gathering with business leaders at the Golden Center in Parque Norte, Buenos Aires City, Caputo emphasised that enhancing Argentina’s competitiveness necessitates tax reductions, regulatory simplifications, and a decrease in financial costs. Argentina experienced the second-most significant industrial decline globally from 2023, the year Javier Milei assumed office, to 2025, as detailed in a report by the consultancy firm Audemus, which utilised data from the United Nations. The manufacturing sector experienced a decline of 7.9%, with only Hungary exhibiting a more significant decrease. In July of last year, Argentine industrial activity experienced a significant downturn, registering a year-on-year decline of 4.9%, reminiscent of the levels seen during the pandemic.
Notwithstanding, the economy minister defended the government’s economic course and ruled out the possibility of resorting to a devaluation to enhance the competitiveness of Argentine industry. “That is not lowering the ‘Argentine cost,’” he said, referring to what is known in Spanish as the costo argentino (Argentina’s high cost of doing business). “It is impoverishing wage earners. When I hear some colleagues talk about this, I see a concerning economic myopia,” he argued. Caputo enumerated the reforms he deems essential for sustainably enhancing competitiveness: tax reductions, regulatory cuts, decreased financial costs, and infrastructure improvements. The minister also announced a series of measures aimed at alleviating the financial and tax burden on businesses, particularly small and medium-sized enterprises. These measures include the extension of tax deadlines and the suspension of tax-related asset seizures by the Revenue and Customs Collection Agency (ARCA, in Spanish).
The head of the economy ministry emphasised the importance of solidifying the shift in the economic model implemented by his administration, asserting that macroeconomic stability and predictability are critical prerequisites for rejuvenating investment and fostering growth. “I think it is important to emphasize where we are coming from, and I believe the vast majority do not want to go back. We are coming from a model that clearly was not the right path. The data confirms this,” he said. His assessment indicates that the country had undergone over 14 years of stagnation in both employment and economic activity prior to President Milei’s assumption of office. Caputo attributed this to a system marked by fiscal deficits, monetary issuance, debt, foreign exchange restrictions, and a deficiency in productive credit. He added that this model created financial distortions and compelled the economy to stay closed, resulting in adverse effects on production and incomes.
To bolster his argument, he referenced the timeframe from July 2022 to December 2023, during which industrial activity experienced a decline of 11%, based on the data he provided. The minister articulated that the government’s economic program is founded on three key pillars: macroeconomic stability, a structural reduction in Argentina’s elevated costs, and the gradual expansion of the conditions set forth under the Large Investment Incentive Regime. Caputo stated that the objective is to transition toward a framework where the investment conditions set forth under the RIGI can progressively be applied to all productive activities. The official stated that the government’s objective is to establish conditions that enable all sectors to take advantage of a comparable framework of incentives and predictability. “The idea is not for it to remain a special regime forever, but for the entire economy to converge toward the RIGI,” he said.
