The Minister of Economy, Martín Guzmán, defended the agreement reached by Argentina with the IMF and assured that “reducing inflation is today the main objective of macroeconomic policy.”
In separate reports with the newspapers Clarín and La Nación, carried out on Friday in the French capital, where he held meetings with the Paris Club and participated in a meeting of the energy sector, Guzmán said that “it is important to work on the basis of consensus but also with reason” and that “with the IMF it was sought to take into account that contingencies could arise that would require adapting the agreement”, in the face of the new world conditions imposed by the war between Russia and Ukraine.
“The Russian invasion of Ukraine has been a very strong shock for everyone. It has implied an increase in the price of food around the world and an increase in the cost of energy. In the last weeks of the negotiation (with the IMF), precisely, there was a focus on including certain guidelines that allow us to have the capacity to react to contingencies. In the world we are living in, the levels of global uncertainty are high and, therefore, contingencies are appearing,” said the minister.
“The Russian invasion of Ukraine has been a very strong shock for everyone. It has implied an increase in the price of food throughout the world and an increase in the cost of energy”
With the agreement already underway, after the endorsement of the agency’s board of directors on Friday, “today we have a more stable platform, which did not exist before. Before there was a different level of uncertainty. Today there is a path that can be traveled, understanding that along that path, situations will arise that will have to be dealt with. That is what we will do with the national government,” said the minister.
Guzmán stressed that the Argentine economy “is already reactivated. He grew 10.3% in 2021, beating all forecasts. Multilateral organizations projected that it was going to take between 4 and 5 years to be able to recover what was lost in 2020. The recovery has been very strong, both from the point of view of production and employment, as well as from the point of view of investment. What we are looking for with this agreement is to be able to give continuity to that trend.”
When setting objectives, the head of the Palacio de Hacienda remarked that “inflation is today the main objective of macroeconomic policy. And for this, it is necessary to attack the multiple causes that generate it”.
“In the first place, it is necessary to have greater exchange rate stability and strength. And for this it is essential to be able to accumulate international reserves. The debt burden must be made sustainable. And on the other hand, to continue improving the exporting productive profile in order to obtain more foreign currency and sustain exchange rate stability. In addition, it is necessary to continue improving the financing profile of public policy, and in this sense it is important to continue reducing monetary financing to the Treasury, because that will strengthen our currency”, he detailed.
“It is necessary to have greater exchange stability and strength. And for this it is essential to be able to accumulate international reserves. We must ensure that the debt load is sustainable”
When asked about the existing differences in the government collation regarding the agreement with the IMFGuzmán avoided issuing an opinion on the matter by assuring that he heads a Ministry “that has to manage economic policy, to achieve the conditions that allow the country not to repeatedly collide with the crises that generate so much economic and social damage” and stressed the importance that the understanding had the endorsement of Congress.
“An agreement has never passed through the National Congress: it is the first time that this has happened. It was approved by Congress, with 80% of affirmative votes. This sets a historical precedent,” he emphasized.
About the war between Russia and Ukraine, Guzmán said that “Argentina must work multilaterally, taking advantage of opportunities with all the countries with which it can build it. But it is also a priority to be able to contribute to an international order in which the societies of the world can coexist. A war is always harmful to humanity and is reprehensible”.
“Regarding the relationship with the rest of the countries in the world, including Russia, my responsibility is to focus on economic issues. What I can say about it is that there was a potential for opportunities in sectors of the real economy. But for that potential to be exploited, there must be respect for a certain international order and a situation of peace”, the minister concluded.
