For the director of the consultancy firm PxQ, Emmanuel Álvarez Agis, the new agreement with the International Monetary Fund (IMF) is harmful for Argentina. “Rather than comply with the terms of the agreement with the IMF, I prefer to default,” he said.
The economist pointed out that it is harmful because they keep the fiscal deficit target at a time when the harvest will fall product of the decrease in withholding taxes due to drought.
Speaking with El Destape radio, Alvarez Agis highlighted that conditions have changed, mainly because of the drought, and then for him. the IMF cannot maintain the same requirements, except for the reserve target. “We can’t continue with the deal as if nothing happened”he underlined.
“The agreement should change because the situation has changed drastically”marked the former Deputy Minister of Economy Cristina Kirchner.
In this sense, he added that it is “very serious” the current conditions are maintained. “Argentina will face the worst drought of the century with a loss of 20,000 million dollars in exports”She said.
“It’s a situation beyond the control of any government,” he said. And she added: “they ask you to maintain the spending dynamic when you know Argentina will lose a lot of revenue due to declining withholdings. In other words, the expenditure adjustment will be much larger. They give us matches in full crisis”.
In this sense, he underlined, “I was the first to say that we need to agree with the Fund. But when circumstances change, we need to change the agreement”.
Álvarez Agis warned about Argentina’s future if it is assumed to comply with this revision of the agreement with the IMF and recommended asking the IMF for a disbursement for the crisis in the productive sector. “We propose a compensatory policy because we will have a difficult 2023”he warned.
“If these are the parameters, I prefer to violate the agreements with the fund”he assured.
“We can’t continue with the same recipe if the world has turned upside down,” he said. And I add: “This year, with the worst drought of the century, we should lower the deductions. We can’t lower them (withholdings) because the fund wants us to have the same tax target. Circumstances have changed and we cannot subject Argentine citizens to the impacts of the worst drought of the century without doing anything.”
The former Deputy Minister of the Economy of the last government of Cristina Kirchner recalled: “The money the Fund lends us is to pay the Fund itself, eh“.
NS
Source: Clarin
