Martín Guzmán travels to Washington to negotiate the agreement with the IMF and build credibility

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Martín Guzmán travels to Washington to negotiate the agreement with the IMF and build credibility

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Nartpin Guzmán, in Washington, last year.

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Minister Martín Guzmán arrived this Tuesday in Washington to participate in the traditional spring meeting of the International Monetary Fund and the World Bank, sharpen with the organization’s officials the implementation of the agreement signed at the beginning of March and build credibility According to experts, previously “The weakness of the program”.

Thus Guzmán distances himself for a few days from the economic turmoil and the pressures of hard -working Kirchnerism in Buenos Aires and devotes himself to the transition to a more technical environment, even if both are complicated.

During Holy Week, the minister held a meeting with a small group of colleagues in Chapadmalal, where they reviewed the management and defined strategies for meetings with Fund staff.

Before leaving for Washington, Guzmán, along with President Alberto Fernández, announced an emergency bonus of up to $ 18,000 to rebuild the income of more than 10 million informal workers, monotax workers, private household staff and retirees, while announced that he will be promoting in the coming weeks is a project for leased the extraordinary profits of large companies.

Guzmán arrived in Washington with the Secretary of Tax Policy, Roberto Arias, and the Undersecretary of Energy Planning, Santiago López Orsini, along with other officials from the Treasury Palace.

Also arriving these days is the Secretary of Strategic Affairs of the Presidency, Gustavo Beliz, who will act as governor of the Argentine chair at the World Bank. The head of the Central Bank, Miguel Ángel Pesce, will participate almost from Buenos Aires.

Martin Guzman and Kristalina Georgieva

Martin Guzman and Kristalina Georgieva

The meetings

Argentine officials will hold meetings with IMF staff in order show how the implementation of the plan is progressing to reach second quarter goals, to shoot a disbursement of US $ 4,169 million in June.

However, Fund officials will raise some risks and doubts, primarily due to financial objectives and reserves at the end of the year. There are fears about changing the energy landscape due to the war in Ukraine, that is it will be difficult to achieve a reduction in subsidies in the sector at 0.6% of GDP established in the agreement.

there is also worries about reserves because the Central Bank could not afford to keep the dollars received from the harvest. And it is estimated that there will also be questions about the insides of the Government and the invasion of Kirchnerism in Guzmán.

The little shepherd and the wolf

Alberto Bernal, head of emerging markets and global strategist at XP Securities, said Clarion that Guzmán’s work would be different this time in Washington because the agreement had already been signed and approved.

“Now the Minister needs to work on building credibility. Argentina is currently experiencing a situation as in the little shepherd and wolf. No one is willing to give Argentina the benefit of the doubt. Therefore, we now enter ‘seeing is believing’ stage.

Bernal said the IMF was concerned about “the Argentina’s capacity to achieve the goals established, and the political capacity of the coalition government to bring Argentina out of the current difficult macroeconomic situation ”.

Carlos Abadi, executive director of financial consultancy Decision Boundaries said Clarion that “Guzmán will listen, will not ask anything. It already has the approval of the staff and the board. ” And now, “the Fund’s biggest concern is the weakness of the program. It’s a program that has very few conditions and, for it to be successful, all of them must be fulfilled in a timely manner ”.

He added that “the Fund will insist on this point and be will advise Guzmán to be extremely compliant in the beginning there were some promises to generate a margin of error that does not exist today ”.

The most important of these promises is cessation of monetary financing from the Central BankAbadi pointed out. “That’s the“ anchor commitment ”where others (reducing subsidies, improving collections, etc.) become”.

Both Abadi and Bernal taught that there is no chance that the agreements will be recalibrated these days.


Source: Clarin

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