Sergio Massa, new Minister of Economy
Tax: the target agreed with the IMF, a deficit of 2.5% of GDP, will be achieved
Earlier, the official had ratified the roadmap agreed by his predecessor, Martín Guzmán, to reach a fiscal deficit of 2.5% of GDP for this year.
Some time before the conference, Massa’s team distributed some papers with the main fiscal measures. Among these it was said that “the budget deficit target of 2.5% will be achieved”. In reality it is a goal agreed between Argentina and the IMF which was then included in the budget expanded by the DNU.
He also adds that “no advance to the Treasury will be used for the rest of the year”, which means that it will not continue to finance the fiscal deficit with emissions.
He also ratified what had already been announced by Silvina Batakis, former Minister of Economy. “The freezing of the state-owned plant regulates all sectors of the national centralized public administration. In addition, each jurisdiction will be responsible for decentralized companies, which will also be affected by this limitation.
One of the most important aspects of fiscal policy will have to do with subsidy policy. “There are 4 million families who have given up on using benefits. Among the nearly 10 million households that have applied for the subsidy, we will promote consumption savings. We cannot continue with a scheme where those who spend the most receive more subsidies. In electricity, we subsidize up to 400 kWh, reaching 80% of users, but only 50% of the total residential consumption. In the case of gas, the same logic applies.
Commercial: cases of overbilling of imports will be reported
The second battery of measures announced yesterday by Sergio Massa concerned the external front. The big market question is how does the new minister intend to raise dollars to finance imports and tighten exchange-rate policy?
“We will promote through DNU schemes for the agribusiness, mining, hydrocarbon and knowledge economy sectors with benefits for everything that represents export growth.”
He stresses that situations of abuse by companies have been detected through triangulation mechanisms with under-invoicing of exports and over-invoicing of imports. “We will open a register for 60 days so that they rectify their position in front of customs. After 60 days we will submit the relevant complaints to Argentine justice for those cases that are not presented to declare or rectify. We will also file a complaint with the US Anti-Money Laundering Unit for money laundering. “
He also added that: – Export financing will be promoted. “The goal is to increase the volume, but also the number of Argentine companies that export. We have launched a credit program at promotional rates and a guarantee plan for the main exporters ”.
– A traceability system for foreign trade will be implemented. The idea is to have greater control and transparency in the use of foreign currency for imports.
“We will promote and defend every dollar of every Argentine. There are measures to increase exports but also to control import abuses, “Massa told the press conference that marked his debut as economy minister.
Currency Front: About $ 7 trillion is expected to strengthen reserves
Sergio Massa announced that “as of today (yesterday) we have agreed an early export regime with the value chains of fishing, agriculture, mining and other sectors that will total US $ 5,000 million which the reserves of the central bank will increase “.
He also adds that: – Advances in disbursement of $ 1,200 million are being made with international organizations for ongoing and ongoing programs.
– In the next few days, a further disbursement of 750 million dollars will be signed with CAF.
– Four REPO offers are being evaluated to strengthen reserves and buy back sovereign debt. “Three international financial institutions and a sovereign fund that we will resolve in the next three weeks have brought us their proposals”.
– Massa yesterday held a first “productive” working meeting with the IMF as part of the implementation of the program to continue with the expected disbursements and face the challenges.
A spokesman for the Monetary Fund commented last night that “earlier today (Wednesday), an IMF team held a productive meeting with the new minister Sergio Massa, and his team, to discuss the implementation of the supported program. from the IMF and the importance of facing Argentina’s challenges ”.
The main question last night about strengthening reserves was what would happen to the exchange rate. Massa ruled out a devaluation. The goal agreed with the IMF for this year is for Argentina to accumulate reserves of $ 5.8 billion.
Verification of plans, voluntary exchange of bonds and aid for retirees
Massa announced yesterday that the pensioner mobility index will be announced on August 10, but with a strengthening that will help retirees overcome the damage caused by inflation.
In addition, corporate bodies and workers will be convened on Thursday next week in order to ensure a mechanism that allows the recovery of the income of private sector workers in the cases of those earning between 50,000 and 150,000 pesos. It includes a review of the family allowance system.
An issue that will attract attention within Kirchnerism and social organizations is that Massa has promised that “we are facing a policy of reorganizing social programs centered on three axes: the return to the labor market, the strengthening of associative work and cooperative and the protection of those situations of vulnerable groups. On August 15 the Ministry of Social Development starts an audit that will be carried out by the universities. Those who do not respect will receive the suspension of the plan “.
It will also begin the unification of all the credit programs that the national state has into a single program which will be called Argentine Credit. It will unify all credit promotion policies for the productive sectors, SMEs and commerce. Between now and the end of the year, without further expenses from the Treasury, 400,000 million dollars will be applied.
It was also announced that a voluntary exchange of deadlines in pesos will be launched in the next 90 days, ending on Tuesday, for which there are already commitments of over 60%. Finally, there will be calls to the liaison table and Congress to address the new laws
Source: Clarin
