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New Minister of Economy of Argentina ratifies commitment to the IMF, but does not rule out changes in the program

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The new Minister of Economy of Argentina, Silvina Batakis, ratified her commitment to comply with the agreement reached between the Argentine government and the International Monetary Fund (IMF) to refinance a loan of more than US$ 40,000 million, although she did not rule out changes in the economic program established with the multilateral organization.

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As Argentines, we have decided to agree to this agreement and we have to comply with it, see the goals, and in each revision of those quarterly goals there will surely also be some modifications, because the world is changing more than ever due to the issue of war (in Ukraine )”, he declared to Radio El Destape.

The new head of Economy, who took office this Monday after the resignation of his predecessor, Martín Guzmán, last Saturday, assured that the goals for the second quarter “effectively” were fulfilled, something that will be more difficult to achieve in the next two revisions.

The second semester is a very complex semester for the Argentine economy, because there are many maturities in pesos, there is a very strong maturity in September and also at the end of July, so that, obviously, is going to generate tensions”, recognized the minister.

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We have to be realistic and honest. Tensions are going to exist, but we have to work together with this economic program and try to ensure that this program has the necessary adjustments so that the population begins to be able to improve all its living conditions.”, he added.

Batakis, an economist with a heterodox profile, was sworn in as economy minister on Monday, amid tensions in financial markets and a growing split in the ruling coalition.

After her appointment, IMF sources consulted by Efe expressed their willingness to work with the minister to “keep helping” to the South American country.

We look forward to working with Minister Silvina Batakis and her team to continue supporting Argentina and its people to strengthen macroeconomic stability and address its profound challenges to lay the foundations for more sustainable and inclusive growth.”, an IMF spokeswoman told Efe, who also wished Martín Guzmán “All the success in your future endeavours”.

As agreed with the IMF, the country must reduce this year its primary fiscal deficit to 2.5% of the Gross Domestic Product (GDP) -from 3% in 2021- and monetary assistance from the Central Bank to the Treasury to 1% of GDP -from 3.7% in 2021-.

In addition, it must add US$5.8 billion to the reserves of the Central Bank, in a scenario of shortage of foreign currency.

The Argentine economy managed to grow 10.3% last year after three years of severe recession, but this year activity has lost vigor, while high inflation, one of the country’s main macroeconomic problems, has accelerated as a result of the Russian invasion to Ukraine.

Source: Gestion

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