Despite the poor result in January, which brought inflation to 6%, and the prospects that the February index will remain at the same level, Minister Sergio Massa insists on the fact that the objective of closing election year with 60% inflation is still achievable.
“No bad results in one game will take me out of the league fight to bring down inflation”Massa noted in a CNN interview with María O’Donnell and Ernesto Tenembaum.
When asked if it is possible to achieve the objective of bringing inflation to 60% this year, as foreseen by the Budget Law, Massa reiterated that this number “is achievable”.
The minister assured that “the objective of halving inflation that we received has not changed”. Despite this expectation, private screenings prove it the year will close with an index close to 100%, similar to 94.8% in 2022.
“The hardest thing is managing expectations, especially since I had to assume a political and economic crisis: inflation at 7.4, negative reserves, with a huge deterioration in the trade balance; and also with relative prices absolutely out of place,” he told the Conecta2 program on CNN in Spanish.
Massa also referred to the complications faced by the central bank in hoarding foreign currency and the impact of the shortage of dollars on the broader economy.
“The first challenging restriction that we have for the next 12 months is to imagine how to find a point where we are attractive for all that is the Argentine agro-export sector, because this weighs on us in reserves; why Argentina needs to build up reservesbut also how we use them to support activity level,” he said.
The head of the economic portfolio raised the need to understand that “It is important that every Argentine PMI, that every Argentine company that produces goods has the dollars to increase the supply of goods because, ultimately, part of the inflationary problem has to do with two and a half years without access to credit, financed by issuance, with a 6 point deficit relying only on Treasury assistance”.
Regarding multiple exchange rates, he indicated that “Argentina must move towards simplifying this process, trying to balance the input and output piles of producer goods, consumer goods, and trying to balance the piles of luxury products or products that already have somewhat dollarized prices.”
Impact of debt in pesos
Massa stated in the interview that “the debt in pesos is absolutely sustainable and it will also be clear and demonstrated in the next few days, when we finish closing the second quarter, that it is the only one this year that has, shall we say, a strong component not internal to the State, but a strong component of participation by banks, mutual funds investment and insurance companies”.
Massa denied the recent Together for Change statement in which top leaders in that space said that debt in pesos is unpayable. “Not only is it not priceless, but after the second quarterthe next government will have a profile and a curve for 24 and 25 that is much better than what this government had when it started in terms of output,” he noted.
When asked if the agreement with the Fund is enforceable, he replied: “Yes, of course, yes, yes”, while clarifying that “the proposal must be how we multiply the generation of dollars from the four advantages that Argentina has for the next few years. And this must be Argentina’s underlying discussion”.
AQ
Source: Clarin
