Batakis ratified its plan to adjust spending to governors

worried about the lack of dollars and social unrest, Silvina Batakis met this Monday with five governors to protect her economic stabilization plan. The meeting at the Palacio de Hacienda was the first in a series that will continue this Tuesday to strengthen the measures announced last week, with an eye towards control spending and ease the tensions on the markets unleashed since June.

Batakis was locked up with provincial leaders for two hours in the Scalabrini Órtiz room on the fifth floor. He notes the concerns about investment and financing of public works, shares his views on activity, employment and the delicate trade situation. And he picked up signs of support for the controversial fiscal package launched last Monday. “The accompaniment, the support of the minister, is important”, say official sources.

The meeting was attended by Axel Kicillof (Buenos Aires), Raúl Jalil (Catamarca), Omar Gutiérrez (Neuquén), Gerardo Zamora (Santiago del Estero) and Osvaldo Jaldo (Tucumán). And this Tuesday will be the turn of Sergio Uñac (San Juan) Gustavo Bordet (Entre Ríos) and Ricardo Quintela (La Rioja).

The officer looks out the challenge of “balancing” the accounts, without generating a recession or aggravating poverty. To achieve its goals with the IMF, it promised to tie spending on additional revenue, freezing public employment and centralizing resource management, along with the removal of energy subsidies. A course that brought the movements to the streets and generated uncertainty in the provinces.

In response, the President announced on Monday the start of the seven major works in the provinces a plan of 120 projects with a total investment of 837,000 million dollars. “I know that some numbers must be adequate, but this does not come at the cost of stopping public works,” Alberto Fernández of Casa Rosada said in the morning together with the provincial leaders, who at 14:00 went to Economics, where they would meet until at 16:00

The numbers show that the government is trampling on the execution of public works: this item reached 26% in May, according to the budget amended by decree, and 33% in June, according to the Public Office of Congress (OPC). The agency’s latest report indicates that investments made by the Nation increased by 9.4% on an annual basis in the first half in real terms, while funds transferred to provinces and municipalities for works decreased by 1%.

Public works are essential to generate employment in the provinces, but clashes with the agreement with the Fund. There, a sharp reduction in spending is expected in the second half, with a focus on pensions, capital expenditures and goods and services. The idea is that investments in infrastructure range from 2.2 to 1.8% of GDP. This was the roadmap signed by Martín Guzmán and that Batakis would remain unchanged to reach a fiscal deficit of 2.5% in 2022.

The meeting with the governors served to ease tensions, following last week’s criticisms of the leader of La Cámpora and the Buenos Aires official Andrés “cuervo” Larroque, who warned about the “serious” economic situation and he called for measures to support income. “We believe that we must give time to the measures that are taken for the changes to take effect,” say sources from La Provincia.

Despite IMF support for the minister last week, the economy continues to do so signs of frailty. Inflation accelerated in June to 64% yoy and the Central Bank continues to lose reserves. This Monday he had to sell 130 million dollars for energy imports and liquidity (CCL) rose to a record $ 304 on a day when the President targeted those who dollarize in parallel markets.