The task they will have this week is to reach consensus on some of the main numbers of what would be a new agreement. With a greater postponement of the deadlines – the “Multi-year” program was expected in the first week of December – now expectations fall on the date of December 15. The central point in the negotiations with the IMF would be the goal of the fiscal deficit: while Martín Guzmán proposes a new reduction to 3.5% of GDP, the IMF would ask for a greater effort.
On the other hand, and as is traditional in the agreements with the Fund, the claim of the agency’s technicians is to reduce the fiscal deficit by cutting public works, something that Guzmán has no intention of complying. In what is clear that there would be a greater understanding is on the issue of public rates where the government has been raising since it took office, the segmentation of rates. As for the dollar, it is almost determined since Argentina will not be able to go to a restriction reduction scheme at least in the short term.
The president of the Central Bank, Miguel Pesce, anticipated this week before the businessmen of the Argentine Industrial Union (UIA) that there will not be a sudden devaluation because in Argentina there is generally an overshooting (over reaction) of the markets when this occurs. The IMF is ready to accept a plan to gradually reduce the gap.
The point to agree on is how long the government is willing to accommodate the variables. What is clearer on the side of the Ministry of Economy, is that it will try to extend the terms to 2026, while the agency aspires to start receiving payments in 2024.
The program to be negotiated is for Expanded Facilities, which last the maximum term allowed so far, of 10 years. It also seeks to include the payment of US $ 1,800 planned for December in the agreement to avoid facing this commitment at a time when the Central Bank (BCRA) is in tension.
At the local level, Alberto Fernández sought consensus: on Friday he met with representatives of the social movements and Guzmán with the CGT. If there is something clear, it is that Argentina will be committed to an agreement for at least ten more years and for that, they will need the agreement of all political sectors. The challenge in the coming years is enormous.
Source From: Ambito

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