Sergio Massa talked about everything: what he said about the candidacy, inflation, the IMF, the ‘bomb’, drought and dollars

Minister of Economy, Sergio Massahe gave an interview to CNN in Spanish in which he elaborated on various topics, such asinflation, the dollar, his candidacy for the presidency, reserves and the political consensus that Argentina needs to start.

“I have committed myself to a scheme of order and work to guarantee that Argentina, the 2023 process, will go through in stability and not with the influence of panic on the rush to hyperinflation that finally did not happen. It is a personal challenge. I set myself tough challenges and I don’t worry about being told ‘you didn’t hit that number’. As long as I see that the work we are doing somehow guarantees stability for people, growth, stability of employment and a slow improvement in income recovery, I will continue to fight,” Massa said, clearly referring to the unfulfilled forecast. lower the inflation rate to 3% for this summer.

Coinciding with the first meetings of the aforementioned and shaken Election table of the Front of Stthe head of the economy again referred to a possible election candidacy: “I only tried once for the presidency and I was young. I said this at the meeting with the mayors, I have political responsibility with the leader of the Slovak Republic, as an integral part of the leadership of the coalition, I believe that it is issue and being the Minister of Economy are incompatible in Argentina”.

“What you have to do is fulfill the goals that society expects you to fulfill, not running around looking for something other than what I have to do todayand that is to be a minister,” he finished.

According to Massa, “It’s harder to manage expectations, especially because I had to take office in a political and economic crisis. Inflation at 7.4, negative reserves, a big deterioration in the trade balance. And also with relative prices that are absolutely in the wrong places. So, the need to answer, but to make good use of time so that those answers are final and not magical.”

“Part of the problem with inflation has to do with two and a half years without access to credit, financing by issuing, with a deficit of 6 points, which relied only on the existence of the State Treasury, and that generated a large tide of pesos,” he assured.

And he continued: “The goal of lowering inflation is the goal that we have as a team. The goal of halving inflation that we got a little bit is that the initial message that we gave has not changed. Even at the time when we were planning, we did not think that we would have a drought that would increase the price of tomatoes by 60 percent.. This is not an excuse. I control reality.”

In the second part of a memo made by Ernesto Tenenbaum and María O’Donell for the American Signal program “Conectados,” the official warned that “drought changes everything; Argentina is an agro-exporting country, it modifies the trade balance, the fiscal one, because the agricultural sector is the one that taxes the most in absolute terms as a sector in Argentina. With which it modifies the trade balance, modifies the budget, prices, because our basket has a lot of food, meat, fruit, vegetables”.

“I do not start debates denying reality; on the contrary, I believe that my responsibility is based on the reality that we must try to use common sense and make the best decisions in order to overcome this context and have another impact on economic stabilization than the reduction of inflation, which centrally affects the distribution of income” , specified Massa.

20 definitions of Sergio Massa

“Argentina needs to accumulate reserves. But also how to use those reserves to maintain a level of activity. We have a managed trade system that has kind of stopped precautionary party. Gentlemen who, as a precautionary measure, reported vending machines, towels or overinvoiced imports”.

“We had the first phase concentrated or focused on stabilization. The first six months had to be set up in some way, influence the fiscal order, recover reserves. We managed to close 2022 with a level of reserves even higher than the target set by the Fund.”

“What there are are more types of exchange that they have what is called “fiscal devaluation” or “fiscal applications”, which in a way they try to correct by promoting or punishing with taxes, the distortion that can generate in the balance of trade. It is clear that Argentina must move towards simplifying this process trying to balance the input and output piles of what are producer goods, consumer goods”.

“That multiplicity is what creates gaps generated by fanned. We have to correct them. To do this in one day, without a central bank that has the power to accumulate reserves, if you do not have the capacity to find points of balance, can generate what economists call “overshooting”, which damages the value of Argentine companies, the value of intermediaries goods that many companies use to produce.

Reducing the difference from 110 to 30 involves things that are impossible to do without causing pain. And I believe it’s our responsibility to try to make the corrections we need to make while avoiding as much pain as possible.

tax order

When one becomes methodical when it comes to meeting the goals that Argentina has signed up to internationally, when one becomes obsessed with public investments that have a real impact, rather than simply distributing pesos to jurisdictions, it has to do with good use, with use the resources we have in the best possible way.

The fiscal balance with which the state must invest money to reactivate the economy is not incompatible.left When I raised the budget, one of the former economy ministers of Macri’s government wrote me a message saying: “I admire your flies.”

The country must have order. Knowing that there are moments when you have to invest in promotion and knowing that you also have to have moments where you have to recover so that you can somehow recover and invest in another sector.

Agreement with the IMF

Energy production for 2025, which is the first year of major payments (to the IMF), is a surplus of $15 billion, excluding gas exports.

Is the contract with the Fund enforceable? Yes of course. But don’t lose sight of those things, because many times, and I understand that you are more political than economic journalists, many times in search of a political slogan headline, what happens in the end, what you lose sight of are the questions that are crucial for the economic future of Argentina.

There is something the government is going to do in the next few days to continue consolidating and on the way to sterilize the peso, which is a surplus of pesos as a result of the country having a dollar loan with the IMF that had to be renegotiated, so it didn’t have access to multilateral financing for a clearly inexplicable credit operation that served only to finance capital flight.

What the Fund is proposing is to have an honest discussion about the impact of the drought. We are seeing technical staff with intelligence starting to see the impact of the drought, but we are also aware that we have to put in more effort than others.

Economic activity

We are coming off 23 months of job creation, job recovery. We are improving Argentina’s export profile, although there is still a long way to go.

Energy, in which Argentina, when you look at the curve, will go from a a net import balance of almost 7,000 million dollars to a net export balance in 2025 of more than 15,000 million dollars. This year alone, Vaca Muerta has seen a 40% increase in investment compared to last year. And this is mainly related to the fact that we have the second world reserves of Shell gas, the fourth of Shell oil.

We have a process of over-indebtedness with the financing of capital flight, a drop in real income of 19 points in the Macri period. And then, in the two years of the pandemic, we had a process of excessive issuance of pesos, and an additional process of falling income as a result of the fall in Products, and as a result of issuing without leverage in the real economy.

Argentina has a great opportunity in the next 10 years in the world we live in. The problem is that we political leaders, economic leaders, business sectors and sectors of the world of work have the capacity to sit down at the table and say “hey, on these four questions, on these six questions, on these eight questions, no let’s go screw him because the future of Argentina’s wealth is at stake.”

JxC statement

Two JXC communiqués, speaking of Fr bombs They appeared on days when there was a market after 48 or 24 hours. What was the market reaction? 4 things happened: blue went down, there were no bonus routes against Central, making sure that they have a lot of bonuses and that when there are volatile situations they execute them, there was no situation in those bullfighting days, and if something happened I guess you must have noticed them, because today I realized that one of the opposing candidates went to take the exam in Adeb, and that’s because the bank’s shares fell. So, what it seems to me is that Argentina has a fragile economy in some ways, but it has a country that has strength if we know how to use it.

When Macri left Leliqs government against PBI, the product had 12 points, despite everything I told you happened today, the product has 8 points.

Debt in pesos is absolutely sustainable and this will be clear and demonstrated in the coming days when we finish closing the second quarter, which is the only one this year that still has a strong component of the participation of banks, mutual funds.

The opposition’s position since I took office has been that the peso debt must be restructured or paid. This bad peso debt story didn’t start now; started last year. I remember a newspaper headline appearing with the orange pages “unstoppable Massa mountain”.