The definitions of Martín Guzmán at the 57th IDEA Colloquium

“We have lived with a gap situation for a long time. Today it is 70 percentage points less than a year ago, approximately, and depending on what type of exchange we look at, between 60, 50, 70. Today we are clear that we are not going to do no devaluation jump, “insisted Guzmán.

And he added: “The exchange policy will continue in line with what has been proposed in the macroeconomic scheme reflected in the 2021 Budget and then in what is the 2022 Budget project, with the macroeconomic framework defined there.” “We have confidence in the exchange policy that we have been carrying out,” he also said.

While he stated: “Today we have an exchange rate policy that we consider consistent, which seeks to avoid a lag between the evolution of imports and the evolution of exports or, more generally, between the entry and exit of dollars. continue to raise export levels, so that Argentina can have a higher level of reserves, and continue to clean up this stock of speculative capital, carry trade, of which there is still a significant amount. ”

Inflation

“Inflation is a phenomenon that has multiple causes. There was a previous government that stated that reducing inflation was something simple, and it is not like that, because to reduce inflation it is not enough simply to reduce the monetary issue, which was the scheme that prevailed. under the previous government. That was done and inflation ended at almost 54% annually, “said Guzmán.

And he added: “Attacking the inflation problem requires attacking its multiple causes. First, that Argentina can have more foreign currency so as not to experience shocks against the external restriction that imply exchange rate jumps. For that, two things are essential: that net exports increase. and that we solve the problems of the debts. All this we are doing it “.

In other passages of the interview, he added:

“In 2020, we had a debt restructuring process that had a historical character, due to the amounts and what was achieved. This year we made progress with the Paris Club. Now we are negotiating with the IMF a redefinition of that relationship, since the one left to Argentina by the previous government is absolutely unsustainable “

“It is important that in Argentina the State has an expansive role, that supports the recovery with an expansive spending policy in real terms, also that it gradually reduces its deficit. That is an investment in welfare capacity, it strengthens the State, because It implies depending less on indebtedness and less on monetary issuance, and that also strengthens the currency and contributes to reducing inflation “

“It is important for the State to play a role so that there is a decrease in the inertial component of the inflationary process. We must continue working to ensure that there is more confidence in our assets, the assets in our currency, because more confidence in the currency also contributes to reduce inflation in Argentina “

“We see the reduction of the fiscal deficit as something positive and, at the same time, it is necessary for the State to continue in an expansive role that underpins the recovery and allows it to pass from a double crisis – that of the macroeconomic scheme of the Juntos por el government. Change and that of the pandemic- to a double recovery “.

Negotiation with the IMF

During the interview, Martín Guzmán referred to the importance of reaching an agreement with the IMF for the debt. “We have a situation of debt burden that, according to the stand-by agreement of 2018, Argentina cannot face in the anticipated times. Having requested a loan of 57 billion dollars, of which 45 thousand were disbursed, was absolutely incompatible with any path of ability to pay the debt, “he said.

Likewise, he added: “When you have more debt in dollars it means less possibilities of expansion of economic capacity and more inflation, when dollars are lacking there is less growth and more inflation. It is very simple, then you have to solve it.”

“We seek to reach an agreement with the IMF that will allow us to refinance all these amounts, an agreement that is based on our vision of how to manage the economy and in that framework the negotiations take place,” concluded Guzmán.

Bookings

Regarding the reserves of the Central Bank, Martín Guzmán stated: “We had the first seven months of the year clearly favorable in terms of accumulation of reserves. The Central Bank accumulated around 3,500 million dollars, then we had the entry of the Special Rights of Giro (DEG), which strengthened the exchange position. And then we have the dynamics that is absolutely to be expected in this last part of the year “.

“We believe that we can give continuity to the exchange policy that we have been carrying out, which is the same that we announced in September 2020, when we sent the budget bill for the year 2021. Exports are growing. In August we had a value of exports that we did not have since 2013, “he concluded.

The main definitions of Martín Guzmán in IDEA:

• We have confidence in the exchange policy that we have been carrying out
• Exchange policy will continue in line with what has been proposed in the macroeconomic scheme reflected in the 2021 Budget and then in the 2022 Budget
• We are clear that we are not going to make any devaluation jump
• Conditions must be created so that the economy can sustain a course and its levels of growth
• The role of the state is absolutely essential.
• The State resolves issues that the private sector alone cannot resolve, and that is what reflects how we manage the economic issue: betting on infrastructure, the generation of knowledge, the application of knowledge in production
• It is essential that the State continues to play an expansive role that underpins the recovery and allows the transition from the double crisis (that of the macroeconomic scheme of the government of Together for Change and that of the pandemic) to a double recovery.
• The private sector also has a fundamental role. In a situation of a normally functioning economy, it is a prime mover.
• To solve many problems in Argentina, the public sector and the private sector must work hand in hand. This is very important so that we also strengthen ourselves as a Nation State, that is what would do Argentina good.
• Today we have an economy in recovery and what we see in the future is an economy settling in that recovery, which is less heterogeneous than it has been.
• Exports are growing. In the month of August we had an export value that we had not had since 2013
• This year investment in Argentina is growing
• Macroeconomic stability is the central condition for the generation of private employment in Argentina and for it to be sustained.
• Having requested a loan of 57 billion dollars is absolutely incompatible with any path of debt repayment capacity.
• When you have more debt in dollars it means less possibilities of expansion of economic capacity and more inflation. When dollars are missing there is less growth and more inflation. We seek to reach an agreement with the IMF that is based on what is our vision of how to manage the economy
• The ban on layoffs has to do with a temporary situation
• There was a previous government that stated that reducing inflation was something simple and ended with almost 54% per year
• We work for an economy that generates hope, tranquility and where there is motivation that is reflected in better realities for all
• For this Government, an orderly macroeconomy is a fundamental factor for development
• The main thing is to stabilize the economy and consolidate a production model that adds value and creates employment.