Written by Mara Ludonia
The government has put its cards on the table to be able to finish concluding an agreement with the International Monetary Fund, by whitewashing that the fiscal path is the difference “marrow” Between the two parties, and that there is resistance in the Council, mainly from the largest shareholder, the United States, to support the Argentine proposal.
While the government seeks to strengthen a domestic front and at the same time tries to open negotiations with the international community to reach an agreement with the International Monetary Fund before the end of March, Argentina has to pay the agency $1,655 million between the end of January and the beginning of February, in interest and additional fees for the previous loan.
The Extraordinary International Monetary Fund credit surcharge for countries in crisis is still in effect, and therefore has not been removed from Argentina’s list of commitments for 2022.
And despite the recommendations of the Group of Twenty to review it in the context of the epidemic, the International Monetary Fund showed differences that prevented reaching an agreement to cancel the policy of the situation, according to the statement issued by the Board of Directors meeting last December.
With regard to the progress of the agreement, “The difference between what the IMF is proposing and what the Argentine government is proposing is between a program that is highly likely to halt the economic recovery that we are seeing, and it is basically an adjustment program versus one that will continue this strong recovery. From Argentina”Economy Minister said: Martin Guzman, this week during his presentation before the judges at the Museo del Bicentario.
He revealed in the presentation that the government expects to reach a zero deficit by the end of 2027, and the IMF would like to see this target achieved at the earliest.
On the other hand, according to the 2022 budget submitted to Congress, the first period of the agreement will end with an expected fiscal deficit of 3.3% of GDP.
According to reports, the difference in the fiscal path between what the IMF is asking for and what Argentina is willing to give in 2022 will be only 0.5 percentage point in the fiscal deficit.
However, by 2023, the IMF is trying to get Argentina to make a larger deficit reduction. This is what the Argentine side described as an “amendment” and therefore an official refusal to surrender.
The word “modification” was excluded from the discussion with the International Monetary Fund.President Alberto Fernandez said during his speech at the Museo del Bicentenario.
Meanwhile, Guzmen also presented the governors with the hypothetical 10-year debt maturities schedule with the IMF, should an extended facility agreement be reached.
There he showed how the debt burden with the fund will be significantly eased in the next two years, to allow time for recovery and the accumulation of reserves.
But these numbers also reflect the heavy burden of the loan that Mauricio Macri contracted with the IMF and that will continue over time, because it will also have a strong impact in 2028 and 2029, when more than 20,000 million US dollars are paid out per period.
The presentation also revealed the impact of the credit obtained in 2018 on the country’s economy, and for Guzmen, this is the “key setting and tension to continue on the path to recovery.”
“All debt conditions, but there is nothing more than debt with the International Monetary Fund,” he added.
On the rest of the goals, Guzmen revealed that there is a “point of understanding” in reaching the accumulation of reserves, as they are expected to add between 3 and 4 billion dollars next year.
Over the next few weeks, negotiations are expected to continue at the geopolitical level.
“There is no full support from the international community. Every government decides when to express itself,” Guz said, during an interview with Talam, just two days before the show at the Bicentennial Museum.