Following is the talk Marx had with Financial sphere
Journalist: Is it possible to go back on what was announced by the president?
Daniel Marx: I think that as they say, it is a prior understanding. It is not an understanding where all the details are, as it would be in a letter of intent. I think that the fact of having marked it makes it very difficult now to go back, but it is not easy to go forward now.
Q: why?
DM: There are many things to clarify and solve. I believe that questions must then be resolved at the political level, how these obstacles are overcome, and at the technical level, what the definitions are like. How are they going to be implemented?
P.: From a technical point of view, is there anything that catches your attention more than what is known so far?
DM: There are several things. Taking the reports that, among others, the president of the Central Bank, Miguel Pesce, gave you, he says that the definition of reserves is not yet clarified, probably the Fund does not take its disbursements as a point to increase reserves.
P.: Would that be that the DEGS that could be returned in the event of an agreement could not be added to international reserves?
DM: Exactly. It is a theme that can be glimpsed reading between the lines.
P.: What other element is in doubt?
DM: Later, the financing of the Central Bank will probably be defined in nominal terms, not as a percentage of Gross Domestic Product (GDP). This implies that if inflation increases, financing falls in real terms and in terms of a percentage of product as well.
P.: In relation to spending, can you see if there are any cuts?
DM: It would seem that the correction of the Budget goes through the increases in rates and the decrease in economic subsidies. How this is done is pending.
P.: According to estimates, in tariffs, up to one point of GDP can be removed if a correction is made. It is right?
DM: It’s a number, yes, yes.
P.: Wouldn’t the inflation that would go into the new agreement be that of the 33% budget of the 2022 Budget that was not approved?
DM: If it can be. All this I said, if you underestimate inflation, by doing it in nominal terms, you might have problems later on. That is why I think that now the government would be correcting the inflation rate that it had put in the budget.
P.: What difference does it make if it is expressed as a percentage of GDP?
DM: These are similar figures, but they are not the same. The example today is that if you put 1,000 pesos that represent 1 point of product, with an estimated inflation of 30%, if inflation is 50%, those 1,000 pesos end up being 20 points less.
P.: Is this the possible deal, or may there be one with a tougher fit?
DM:Whether there is an adjustment or not depends on the evolution of the economy, and that depends on whether the parallel exchange rate can be stabilized. Or achieve a higher income of funds or lower expenditure and that does not go through exchange controls exclusively.
P.: Can the opposition come to support this?
DM: I think so, it is a matter of political decision dynamics.
Source: Ambito
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