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the voices of businessmen, between support and warnings

While an agricultural sector supports the measure as a path to international credit, it warns about an “ambitious” reserve goal. Some industrialists are worried about the recessionary impact.

Argentine News

The Minister of Economy, Luis Caputo, announced the renegotiation of the goals of the agreement with the International Monetary Fund (IMF). With the Board’s next approval, the seventh review will be concluded and the agency will disburse US$4.7 billion. In the business community there are disparate views about understanding. From the field some voices point out that the reserve accumulation goal is “ambitious” and in the industry show pconcern about the recession which the Fund itself admits will happen.

“Society accompanies this. The doubt of many is whether politicians are going to rise to the occasion,” said Caputo in the microcinema of the Ministry of Economy, accompanied by the head of the BCRA, Santiago Bausili. The technical delegation of the organization arrived last Friday and in less than a week managed to seal new goals with Argentina. The Government is committed to accumulate US$10 billion in reserves by the end of 2024including US$2.7 billion acquired during the last weeks of 2023, and generate a 2% primary surplus of GDP. In addition, it may “end the credit of the central bank to the government”, that is, they will seek emission 0.

For Gustavo Idigoraspresident of the Chamber of the Oil Industry of Argentina and the Center for Cereal Exporters (CIARA-CEC), the foreign currency accumulation goal “is ambitious”, and they will be attentive to the payment of imports by the BCRA to achieve that objective. “The agreement with the IMF is not new, it removes greater international pressure against the possibility of stabilizing the macro only for these months,” analyzes the sector representative.

The renegotiation does not include new disbursements, only those agreed to pay the capital maturities of December – paid off with a CAF loan for US$920 million -, January (US$1,950 million) and the one that will come in April for US$1,953 million. However, Caputo assured that the door to greater debt with the IMF remains open. “It is time for the country to solve its financial problems by solving its underlying structural problems, which is its addiction to excess public spending,” responded the minister when asked about that possibility.

IMF: opinions in industry and commerce

Within the industry, views are varied, depending on the sector represented. For Mauro Gonzalezholder of the General SME Confederation, the announcement “does not generate expectations.” “As long as the adjustment is made on the worker, the consequences for national production will be lethal. Drop in consumption, growth in unemployment, flattened salaries and no measure to reactivate the economy. Fiscal surplus at the expense of the closure of SMEs is dangerous,” determines the businessman.

Instead, for Natalio Mario Grinmanpresident of the Argentine Chamber of Commerce and Services (CAC), the renegotiation will contribute to providing “certainty” about the future of the country, something vital to “support the much-needed stabilization and start a path of recovery of the activity level.” At the same time, it celebrates that the authorities have reiterated the effects of high public spending and chronic debt.

Finally, for the coordinator of the Business Convergence Forum, Juan Manuel Vaquerregularize the situation with the IMF “It is a very positive and essential step” so that companies can make investments significant. “There cannot be credit to the private sector at reasonable rates if the State is in default,” he says in dialogue with Ámbito.

For now, for Caputo, this renegotiation will guarantee that There will be no “shocks” in the next four months, in a context of growing exchange rate gap. However, he warned that, if Congress does not approve the tax reforms to reduce the deficit, the Government will have to “extreme resources,” which would imply greater adjustment on society. For Claudio Loser, former director of the IMF, the distinctive thing about this agreement is that the Fund supported the Government program and it is not “a perceived imposition.”

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