Posted On 13 Jul 2017
The government announced it will resort to fiscal devaluation to improve productivity and competitiveness in companies, in order to revive the national economy. According to Finance Minister Carlos de la Torre, this policy will seek to lower production costs for companies to generate employment and foreign exchange for the country.
“These innovative measures to be applied in a dollarized economy that operates in a very different way from the conventional economies … All this, with the necessary skills to ensure fiscal sustainability,” De la Torre said.
A fiscal devaluation is a measure that has been taken in countries like Spain, which has no currency of its own. The European country implemented a similar policy in 2014 to deal with its economic crisis and the impossibility of devaluing the euro. (I)