- Comply with agreement with the IMF.
- Move forward with the segmentation of public rates.
- Adopt measures to improve the purchasing power of wages.
The agreement with the Fund involves implementing monetary, exchange and fiscal policies. These three points require raise the interest rate above inflation, ensure that the exchange rate does not fall behind and adjust public spending.
In this context, moving forward with the universal Income, that the vice president demanded Cristina Fernandez de Kirchner will demand income that the treasury does not count. Although there are no details about the universe of beneficiaries and the amount, it should be remembered that the IFE accounted for almost 2 points of GDP.
Improving the purchasing power of wages is a slogan that the main referents of the CGT have as a reason for concern. Moreover, this Monday afternoon they will meet to analyze the latest events. There are rumors circulating on the market about the possibility of increases by decreewithin the conception that many companies had extraordinary results, but so far they are only versions.
tax hole
Analysts consider the fiscal issue to be one of the biggest problems facing Batakis. The agreement with the Fund establishes that the expansion of public spending in the first semester – almost 13% – should be reversed in a contraction close to 8%.
They assess that, with few foreign currency reserves, no external financing, with increasing difficulties in obtaining credit in pesos and with the restriction of not being able to issue more – under penalty of accelerating inflation – the Government has no other option than to carry out a austerity in public spending.
Given the rigidity of expenditures – today aggravated by energy needs – applying austerity policies demands unpleasant political decisionssuch as, to cite just a few examples, not carrying out the purchase of computers for the Education area, cutting spending on health (except for vaccines) or limiting public works.
Precisely days ago it circulated in the Ministry of Economy a reserved report in which it is pointed out that, with the current requirements of the policy, “the fiscal deficit is not financeable.”
Debts
Until the end of last month, the intention of the economic team was to close -however- the goal agreed with the IMF. This was achieved with a Treasury expenditure of slightly more than 800 billion pesos, but leaving some 150 billion unpaid, almost 20% of the expenditures demanded.
A sample button: could not yet get the 4 billion pesos needed to pay census takers.
Government data show that the fiscal goal for the second quarter was met, with an imbalance equivalent to 0.7% of GDP, but in the third quarter it will be necessary to cut the deficit to 0.3%, that is, a reduction to less than half.
This, moreover, in a context of growing demands. One of the most important: while former Minister Guzmán planned to allocate 120 billion pesos to Energy in July, the head of this area, Darío Martínez, asks for 300 billion.
Another of the complex issues presented to the new minister is the segmentation of rates. So far, if you enter the site, you can see that it is not possible to fill the form devised during by the team of former Minister Guzmán.
Now there are some doubts, will continue with the form of Economy or the previous one designed by the Secretary of Energy, In addition, it is known in the Palacio de Hacienda that Guzman it failed to quantify the decrease in subsidy spending if segmentation were successful.
Somehow, the rise in the exchange rate shows the uncertainty caused by the appointment of Silvina Batakis.
Source: Ambito
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