MercoPress. South Atlantic News Agency

Batakis announces spending cuts for Argentine gov't

The unofficial (“blue”) dollar fell to AR$ 263/ 268 (buy/sell) after Batakis' announcements

Argentina's Economy Minister Silvina Batakis Monday warned that the government of President Alberto Fernández “will not spend more than we have,” while launching a series of measures aimed at curbing inflation and restoring federal reserves.

Batakis announced “the guidelines for the ratification of the economic program” and the fiscal goals, together with “other news” after conferring Sunday with the head of state.
“Argentina's productive structural matrix is intact, we want to maintain it, sustain it, make it more complex, make it more productive and generate jobs in Argentina. We want to export more because in that export what we are doing is exporting Argentine labor,” Batakis said.
In the current world scenario, “we need the political and managerial strength of each of the ministers and to give certain order and balance to the public finances of the national state,” she stressed.
“The goals agreed with the IMF are maintained, it is an agreement signed as a state and that we must comply with. Let's remember that in the 4 years of previous management 100 billion dollars were issued and almost 50% were with the IMF, and also debt was issued over 100 years. We are going to implement a debt advisory committee, which will evaluate, analyze and make proposals regarding sovereign debt in pesos,” Batakis explained.
“We are going to make a modification in the financial administration law in two senses: all the national public sector agencies have to be contemplated in what is the efficient management of the budget and the derogations. We are going to make a modification that has to do with public sector personnel at the national level, what we are proposing is that this implementation of the personnel freeze that we have in force today be extended to the entire state,” she added.

“We understand that Argentina has to transit a path of interest rates on a positive path. We will respect the issuance schedule we have planned, which has been fixed since the beginning of the year. At the same time, we will offer other types of instruments to anyone who wants to invest in the government,” the minister went on.

“Regarding the exchange rate, we understand that the multilateral exchange rate is in a situation of equilibrium, we do not see speculative movements in that sense,” Batakis argued.

“Argentina is having record exports, which is allowing us to sustain the great increase in prices that energy is having worldwide,” she also said. “In energy matters, we have been sustaining this increase in energy supply. A few days ago the envelopes for the bidding of the first section of the Néstor Kirchner gas pipeline were opened, which allows us to have a much stronger growth expectation for Argentina and to reverse imports. On Friday the implementation that has to do with the segmentation of tariffs for the different types of populations will be ready,” the economist announced.

“We are going to form the national entity for the defense of competition. We understand that we cannot allow price abuse, what happened this week has no technical explanation and are only speculations,” she stressed.

“We are going to migrate the tax agency of real estate assessments to the Ministry of Economy, from there we are going to compare the value of the real estate assessments of each province to be fairer with each taxpayer,” the minister also said in her speech.

Regarding inflationary targets agreed upon with the IMF, Batakis explained that the deal had been signed before the current global inflationary situation. “We are living in an unbalanced world, which conditions the rest of the variables that the Argentine economy has.”

“It would be very unprofessional of me to risk telling you today what the inflation projection is in this unprecedented situation of global imbalance,” Batakis replied when asked about the

issue.

She also underscored that the unofficial market represents daily transactions worth US$ 3 million, while the official market accounted for US$ 1 billion.

Batakis also admitted the government would be unable “to comply with our obligations in terms of pesos. This is completely ruled out.”

After Batakis' announcements, the most stock fell between 0.8% and 6.2%, sovereign bonds in US dollars dropped around 3.5%, and the country risk index rose to 2659 points.

On the other hand, the unofficial (“blue”) dollar fell to AR$ 263/ 268 (buy/sell).