Diplomatically, Rice ruled out any possibility (at least for now) of discussing the agreed goals, especially that of a fiscal deficit 2.5% of GDP, stating that “the objectives are maintained and I repeat that we had a very positive initial communication (with Batakis) and we hope to continue constructively to achieve the agreed goals and that is where the focus of the discussions is.” As if to leave no doubt about the need to sustain the goals, he assured that the measures announced by Batakis on Monday, “are consistent with the objectives of the program that were agreed to strengthen macroeconomic stability and begin to overcome the deep and entrenched challenges that Argentina faces”.
Conclusions
The conclusions reached in Buenos Aires from Rice’s statements are concrete. There is peace of mind that there will be no pressure from the IMF due to changes in the economic policy applied by the Executive or tightening in sectors such as the social security, labor, tax or fiscal; something that had been left up in the air when last week IMF Managing Director Kristalina Georgieva used the term “painful measures”. Within the Executive there was speculation that the Fund could put pressure on Argentina to apply adjustments that were politically impossible to defend within the ruling coalition. Rice’s public position thus put local officials at ease.
However, the spokesman for IMF He also clarified that the goals cannot be negotiated or modified. And that, throughout 2022, the Ministry of Economy of batakis it will have to respond to the sequence of goals of a 2.5% deficit, 1% maximum monetary issue and a level of reserves in the BCRA that must exceed US$4.8 billion. Only, and for now it is not an official position, this last point could be discussed in the first quarter of 2023, although subtracting only the extra dollars that the country had to spend due to the increase in fuel prices, after the Russian invasion of Ukraine. But not much else.
All of this had been explicitly clarified by Guzmán to Batakis in the meeting that the two held on Monday of last week at the Palacio de Hacienda. In that private meeting, the already former official explicitly told his successor that there will be no possibility that the Board of the agency accepts changes in the current Extended Facilities. Guzmán had made contact with the IMF men in Washington on Saturday afternoon, already when his exit-revenge operation had been finalized.
Source: Ambito
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