Key week for Guzmán: hearings begin for rates and know April inflation

After Cristina Kirchner’s attacks against the economic program and requests from La Cámpora to resign, Martín Guzmán face a challenging weekmarked with hearings to raise the charge and the spread of inflation data for April. Two themes became target of inquiry of Kirchnerism and a central point in negotiations with the IMF before the May review.

The Minister of Economy will monitor from his office because he is not with the President in Spain and Germany.

Tuesday is will debate the elimination of gas subsidies, on Wednesday morning and on Thursday the segmentation of increases. They will be key in determining the scope of the reduction in public funds allocated to energy and the power maintained by the Chief of Economy in an area where a strong opposition by men linked to the vice president, such as Undersecretary of Energy, Federico Basuldo.

Guzmán promised to reduce GDP by 0.6% by 2022, which is equivalent to approximately $ 420 billion. In March, it allowed a 20% rate increase and now aims to implement a different increase from June 1. The 10% of users with the largest ability to pay will have adjustments of more than 200%, most customers will face increases of between 17%and 38%, and social rate beneficiaries increased by 6% on electricity and 0% on gas.

These plans may be delayed or changed because of potential obstacles as well as because of the impact of war on energy costs. The agency considered this in its latest staff report, in which it recommends close monitoring and recalibration due to challenges in hydroelectric production, the high price of LNG and the “difficulties” in implementing the new rate. segmentation scheme was never applied.

Nor does the minister rule out the changes. “Reducing subsidies is not a goal “, they cut near Guzmán. And they point out that, as long as the path of reduction in the public deficit is respected, there will be no problem meeting the fiscal target of 2.5% this year. If the higher expected collection is not enough -the project has not yet been reflected in the unexpected income tax-, Economy should handle other matters of public spending.

The restructuring of the accounts coincides with initiatives sent last week by Kirchnerism in Congress, with a new challenge to the budget restrictions set by Guzmán: a project to the 45% increase in the minimum wage planned for in January is now paid in August and another to facilitate access to retirement for people without the 30-year contribution required by law.

Inflation data to be released this Thursday will also add internal tension. After 6.7% in March, Central Bank market survey forecasts 5.6%. For the full year, they forecast 65.1%, 15 points higher than last year and the highest annual change since 1991. On Friday, Cristina taught the wage policy and the program with the IMF, citing “permanent depreciation is maintained and only increases it. inflation.

The Government is faced with the problem of continuing to accelerate the dollar to accumulate reserves and comply with the Fund or delay it to avoid greater pressure on prices, particularly food. The organization expects that a larger increase in the devaluation rate is needed and inflation also needs to be updated expected up to 48%, a variable that affects the calculation of nominal goals.

Amid cross pressures and uncertainty about his continuation, Guzmán will also seek new acts of support from the business community. After appearing next to the red circle in Llao Llao and at the Alvear Palace, he was invited on Tuesday along with the head of state to the third edition of the meeting organized by the US Chamber of Commerce in Argentina (Amcham). If you travel with the President, you will not find an appointment.