The loss of reserves will no longer be alleviated with a new soybean dollar or some disbursement from an international organization. Sergio Massa returns from India after meeting three times with Kristalina Georgieva with news that will ease the management of the economy, since The International Monetary Fund will make the goal of dollars accumulated in the Central Bank more flexible with which the Argentine government had to comply this 2023.
“War and drought play a role in our economy and it is better to face it by setting achievable goals so as not to be correcting every quarter”, the Minister of Economy told PROFILE about the change that the international organization will announce in the next few hours. At 4:30 in the morning on Saturday in Argentina, Massa and Georgieva had the third meeting in the context of the G20 in which they decided to make official the modification of the goals that gives a break to the shortage of dollars suffered by the Argentine government.
There are three teams working on this new plan at this time: part of the economic cabinet from Buenos Aires, the official mission in Washington and the Minister of Economy from Bengaluru. “The objective is to be realistic and predictable so that the program is really a computer and not a role in the air that is not fulfilled,” explained the Minister of Economy. He added: “The consensus with the IMF is that it is better to adapt the programming of the work of the year from the beginning to give predictability and not have to make waivers during the year”.
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Goals will no longer be reviewed quarterly and the government will no longer need to request a pardon for non-compliance. The economy and the IMF understood that the program had to be adapted to reality. “We are not going to have to review or request waivers every 30, 60 or 90 days. what we are doing is agree on a scheme that projects the targets on a new reality that left the war and leaves us with the drought”, they insisted from the palace of the Treasury. The details will be officially known in the next few hours.
The impact of the war on the Argentine economy is something that Massa has been raising since last year. It all started when the minister sent Georgieva a file on WhatsApp titled The impact of the Ukrainian war on Argentina. This report estimated that our country suffered a loss of 4,949 million dollars as a result of the war unleashed by Russia. Days later, they met in Indonesia at a meeting led by Alberto Fernández in which this was one of the axes they discussed.
“The value of fuel imports grew from 1,999 million dollars –according to the pre-war value– to 5,756 million, which resulted in a net growth of 3,757 million. In relation to the agro-export complex, net exports were 617 million above what was projected before the war. Finally, the cost of export freight suffered an increase of 1,800 million above the estimate before the war. The final impact of the increase in international prices, due to the conflict in Ukraine, was estimated at 4,949 million dollars.”, said the paper that at that time was already in the possession of the IMF. This year the drought was added and therefore, progress was made in the relief that will be announced this week.
Before finalizing these changes, Georgieva announced to Massa that The agency’s staff determined that our country met the agreed goals for the last quarter of 2022which will mean a new disbursement of approximately US$ 5,400 million, something that will also cause relief to the reserves of the Central Bank that in recent days he had to sell almost US$ 1,000 million.
“Fiscal Order, Reserve Accumulation, and the Monetary Order”, are the three objectives that Massa tirelessly repeats for his management. When the head of state inaugurates the legislative year on March 1, Massa will already be back in Argentina and with some good news to give.
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