In the staff report of IMF, which was published today with warnings about the Argentine economy and advances about what the Government will do with the restrictions on the dollar, you can read the letter of commitment to the economic program signed by the Minister of Economy, Luis Caputo and the head of the BCRA, Santiago Bausili.
It lists some achievements such as: having held public hearings to realign public service rates; the strengthening of the Central Bank’s reserves by more than 5.9 billion dollars and that inflation is gradually falling. Likewise, he anticipates that they will use “our executive discretion starting in February to progressively normalize fuel excise taxes.” They recognize that the “stabilization process will be challenging.” Below the full text:
Since our letter of January 18, we have continued to implement our ambitious stabilization plan. More recently, economic and monetary authorities have made decisive progress in resolving importers’ over-indebtedness, have completed public hearings to realign energy utility rates, and have further strengthened the Central Bank’s balance sheetincluding by continuing to guarantee net zero credit to government (all actions above) while doubling our efforts to improve our social spending to protect the most vulnerable.
We have continued to accumulate reserves: more than $5.9 billion since December 10, which will allow us to stay up to date on all external debt services, and High-frequency indicators suggest that inflation is gradually falling.
On the legislative front, we introduced a bill to Congress aimed at creating a more rules-based, market-oriented economy that provides the backbone of future growth and development.
We firmly believe that this project omnibus law represents a turning point in the history of Argentina. To facilitate the passage of the bill by Congress as soon as possible, we separated most of the fiscal package contained in it.
are being achieved progress in the fiscal aspect, since we now have a primary surplusconsistent with the achievement of a general fiscal balance this year.
This reflects the administration’s continued efforts to mobilize revenue, including from temporary sources, and limit discretionary spending.
In this context, we are committed to using all available options to support our fiscal trajectory and objectives including using our executive discretion starting in February to progressively normalize excise taxes on fuel.
Certain features of the Omnibus bill, expected to be passed soon, will support fiscal consolidation, and negotiations continue on other aspects, including improving personal incomes, tax system and eliminate the current distorting pension indexation mechanism, while preserving the real value of pensions through discretionary bonuses.
We reaffirm our unwavering commitment to implement our program. We recognize that the stabilization process will be challenging and, as noted above, we will continue to adjust our policies as necessary to achieve program objectives.
Sincerely
Luis Caputo, Minister of Economy of the Republic of Argentina
Santiago Bausili, president, Central Bank of the Republic of Argentina
Source: Ambito
