The Minister of Economy, Martin Guzman, exhibits in the Chamber of Deputies the 2022 Budget bill that contemplates a growth of 4%, an inflation of 33%, a dollar as of December of next year to $ 131.1, a fiscal deficit of 3.5%, a real increase in social spending and a reduction of energy subsidies.
Within this framework, Guzmán acknowledged in Congress that the main problem this year was inflationary dynamics. “It is a central objective to attack this inflationary process”, Remarked the official. Likewise, he once again stated that despite an exchange rate gap of more than 100%, there will not be a sharp devaluation of the exchange rate.
Meanwhile, he said that in order to sustain a process of economic growth, Argentina needs “sustained growth in net exports.”
The Minister of Economy said today that “there has been no fall in international reserves” and maintained that “for 2022 and onwards the accumulation of reserves is also an objective” of the national government.
During the presentation of the 2022 Budget report, he stated that the country is going through “A strong process of economic recovery, in a solid way”, with a GDP that “grows 10%”, and in a context in which it continues to “fight against a double crisis, the one that began in 2018 and the one that followed the pandemic ”.
Regarding the negotiations with the IMF, Guzmán stated: Next year they face a capital maturity of around 18 billion dollars and for the year 2023 a capital maturity of 19 billion dollars. Which there is no way that someone can consider that Argentina has the possibility of amortizing those maturities in the terms that were agreed ”.
He also said that what Argentina needs as a nation state “is to be able to achieve the best possible conditions and the greatest possible support from the international community to be as strong as possible.”
Next year they face a capital maturity of around 18 billion dollars and for the year 2023 a capital maturity of 19 billion dollars. Which there is no way that anyone can consider that Argentina has the possibility of amortizing these maturities in the terms that were agreed (Guzmán)
And he added that the Government sent a bill in 2020 so that in the future all indebtedness in foreign currency must be approved by the National Congress.
The head of the Palace of Finance, together with his economic team, explained for an hour central aspects of the law of laws before the Budget Committee of the Lower House and gives an account of the changes that will be introduced in the items established in the initiative sent on September 15, as established by the Financial Administration Law.
In another section of his presentation, Guzmán said that the Government aims to strengthen the public debt market in pesos, something that is also planned within the budget for 2022.
“It was important that the public sector had the ability to finance itself in its own currency and define a safe asset in our own currency. This helped to become less dependent on monetary issuance to finance the deficit. Of course, it is not enough and monetary financing has been used in part.”, Detailed the official.
And he added: “We must give depth to the public debt market in pesos to contribute to the development of economic activity. This is taken into account in the budget ”.
The 2022 Budget project foresees a 4% growth in GDP, an inflation of 33% and a dollar to $ 131.1 for next year. It should be noted that the initiative does not include payment to the International Monetary Fund. Meanwhile, private consumption is projected at 4.6%, public consumption growing at 3.1% and investment growing at 6.6%. While it contemplates exports growing at 7.5% and imports rising to 9.4 percent.
Finally, the 2022 Budget considers a 5.3% growth in real wages, which is equivalent to 4% growth in real terms and a trade balance of more than 9,000 million dollars.
After his presentation of just over an hour, the Minister of Economy Martín Guzmán answered questions from the deputies present in the Budget and Finance committee.
Then the official gave the floor to his team to deepen in different aspects. In this framework, the Secretary of Energy Dario Martinez He expounded in regards to energy rates and subsidies. “We want a tariff scheme that in real terms helps to sustain wages,” he said.
“To advance in the reduction of subsidies, a segmentation tool is being developed. We have already surveyed 80% of a large database with more than 16 million users ”, he stated.
And he added: “We have made the decision to remove subsidies for large users. It was a very wise decision. There were many claims of differentiation in terms of the treatment of large users. Except for the health and education sectors, the rest of the subsidy has been eliminated in the search to carry forward the political line that we have ”.
To advance in the reduction of subsidies, a segmentation tool is being developed. We have already surveyed 80% of a large database with more than 16 million users (Martínez)
Regarding the amount of subsidies, he pointed out that international energy prices are going through “great volatility” that undermines the projections that were made. Martínez highlighted the result of the GASAR plan because it “stopped the drop in production” and revealed that it caused a saving of 88 billion pesos in 2021 that will grow to 223 billion next year.
In turn, the Secretary of the Treasury, Raul Rigo, announced that transportation subsidies for the interior of the country will be reduced by one billion pesos.
In turn, the Secretary of Tax Policy, Roberto Arias, defended the modifications imposed by the Government in the matter and questioned the modification of 2017 that “proposed reduction of various taxes, especially progressive ones.”
Since 2019, “we began to modify the system with four central objectives, the system must contribute to fiscal sustainability, recover progressivity, promote activities with greater productive dynamism and the simplification – harmonization of the tax system,” said Arias in Congress. .
With the Social Solidarity Law “it was sought to suspend several of the reductions that were foreseen in the 2017 reform” and gave as an example that “the collection of personal property was multiplied by five”. In addition, he pointed out that “99% of the tariff positions pay less than in September 2018 and 69% in terms of the value of exports today pay less aliquots than in September 2018.” “If there is a tax that we reduced, it is the right to export, “said Arias.
The 2022 Budget is a key project for the search for an agreement with the International Monetary Fund (IMF) carried out by the Government. It should be remembered that before the end of the year, Argentina must face payments of about 1,900 million dollars with the IMF, and Guzmán intends that as part of the agreement this disbursement will have a neutral effect on reserves.
The objective of the ruling party is for the 2022 Budget to be voted on Thursday, but it needs consensus from the opposition. Earlier, the minister met with Sergio Massa, president of the Lower House.
The Budget and Finance Committee began after 1 pm on the second floor of the Annex “C” building of the Lower House with the agreement of its authorities and in that context, Deputy Carlos Heller (Frente de Todos) was voted as president (re-elected) of the same and Deputy Luciano Laspina (Together for Change) as vice president. The secretariat and the vocal offices were also defined.
In this framework, the deputy Mario Negri, leader of the UCR bloc, raised to the commission’s designated president the need not to rush the treatment of the 2022 Budget. “Going to the venue so quickly causes us concern. There are legislators who have been in this house for hours. The budget has been here for three months. The minister has not come (for Guzmán) who promised several times ”, stated the opposition legislator.
“It is highly inconvenient. It is not appropriate to have a hurry of that dimension to rule. Should be given at least one more week. That officials come to answer questions such as the Secretary of Energy, “he added.
While, Heller responded that the request of the Executive Branch and lower house authorities is for the 2022 Budget to become law before December 31. For that, it is necessary that this week the ruling of the official project be signed and before the end of the year parties it can be discussed in the Senate.
The intention of the ruling party is to convene the commission tomorrow and Wednesday with the presence of other officials and with the debate among the legislators themselves, in order to issue the opinion they seek to take to the plenary session of the body between Thursday and Friday.
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