According to the IMF, the meeting with Massa was “productive”

The new Minister of Economy, Sergio Massa, held his first meeting this Wednesday with the authorities of the International Monetary Fund to ratify the continuity of the program agreed in March.

The talks took place ahead of the package of measures announced tonight, which includes tighter budget restrictions to meet the fiscal target, reduce inflation and strengthen reserves.

“Today we had a first productive working meeting with the IMF in the context of the implementation of the program to continue with the planned disbursements and face the challenges,” Massa said in the microcinema of the Palacio de Hacienda.

There he announced a series of initiatives to address the financial and currency crisis that has lasted for nearly two months and complicates compliance with the agreement with the agency.

From the Fund, a spokesman said that “earlier today, an IMF team held a productive meeting with the newly appointed Minister of Argentina, Sergio Massa, and his team, to discuss the implementation of the supported program. from the IMF and the importance of tackling Argentina’s challenges “.

The contact with the staff led by the Brazilian Ilan Goldfajn takes place 9 days after the first and last meeting that Silvina Batakis had with the head of the organization, Kristalina Georgieva, in Washington, and US Treasury officials. On her return, Massa was replaced by her at the Ministry of Economy, so she held that position for only 24 days.

Now, the new head of the Treasury is betting on meeting Georgieva in the coming weeks, when she will start her tour in Washington, New York, Paris and Qatar, four destinations where she will meet investors, bondholders and credit agencies to regain the trust from the abroad and acquire dollars through investments and credits.

After taking an oath at the Casa Rosada Bicentennial Museum, Massa turned to the Economy, where he declared that the government “is about to reach the target of 2.5% of GDP for the primary deficit set by the Budget” and has announced a greater restriction of the Central Bank’s monetary issue.

“I have been instructed on Monday that there will be a $ 10,000 million refund to the Central Bank, a cancellation path that we will try to continue,” he said. “What we will do is not ask for more by issuing money to finance the Central Bank Treasury, we will finance with the resources we get and from the private sector,” she explained.

Likewise, it ratified the “plant freeze” of state employees announced by Batakis and provides for an increase in tariffs for subsidized utilities through a greater reduction in transfers to meet the cost of energy.

“In electricity we will subsidize up to 400 kWh, reaching 80% of users, but only 50% of total residential consumption. In the case of gas, the removal of subsidies will follow the same logic,” he said.

Massa assured that the measures are aimed at fighting inflation. In this sense, you warned that July and August will be the “most difficult” months. A price increase of up to 8% is expected for July. He did not say, however, whether he will try to reach the goal of accumulating net reserves ($ 5.8 billion) and monetary issues (1% of GDP) in 2022.

Given the extent of the crisis, last Thursday the Tigrese was elected by the governing coalition super-minister in charge of the Economy, Productive Development and Agriculture. Since then, the Central Bank has lost $ 1.396 million in gross reserves and in the last few hours the parallel dollars have risen.

At the fiscal level, the primary result of the first half already accumulates 1% of GDP and analysts estimate that at the end of the year it will close at around 3.6% of GDP – more than 1 point than expected – due to a strong real value increase spending on subsidies and other current expenses. The announcements this Wednesday would try to reverse it with a reduction in spending.

“The announcement by the Minister of Economy recognizes the economic problem of the primary deficit as one of the bases to be solved. This implies, without fiscal changes, a drop in spending in the second half of the year, which would derive from an integrated action within the actors national non-financial public sector and provinces, “IAAF said.