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The 2022 Budget includes an agreement with the IMF, a reduction in the fiscal deficit and the cut of energy subsidies

That Argentina reaches an agreement with the International Monetary Fund (IMF) to reschedule debt payments. That is one of the key variables of the project of Budget 2022, that the Minister of Economy, Martin Guzman, turned to Congress minutes before midnight, when the legal deadline expired.

Shortly before the crisis broke out in the Government due to the resignation of Christianity officials, the official had shared an act with the president Alberto Fernandez. Both anticipated that the draft Budget for next year does not contemplate the payment of the US $ 19,000 million that must be disbursed to the Fund during the next year.

On that occasion, Fernández said that the Budget was prepared “giving by the way that next year we do not have to fulfill external commitments. But that requires moving on the negotiation with the Fund and achieve it ”, stated the president, who in the act supported his Minister of Economy.

Guzmán, in turn, stated that indebtedness with the Fund is one of the most serious issues that lies ahead. “Not a single one of the US$45.000 millones that were taken to effectively improve the productive capacity of Argentina, “he said about the agreement reached by the government of former President Mauricio Macri.

“We were faced with this when designing the law of Budget for 2022. We did the math and, if we had to pay the US $ 19,000 million next year of capital that expire next year, what should we do? would mean that instead of having 2.4% of the GDP from investment in public works, there should be 0%”, Assured the person in charge of the economic portfolio.

Guzman -one of those pointed out by hard Kirchnerism due to the electoral defeat of the PASO on Sunday due to fiscal discipline- outlined the roadmap that the Government wants to follow next year and that contains the main variables that will govern the Argentine economy: GDP growth; investment, inflation, dollar, rates, wages and consumption, among others.

As reported by TN.com.ar, a 4% growth in the Gross Domestic Product is expected; inflation of 33% and a dollar to $ 131.1 towards the end of 2022. It also projects a rise in private consumption of 4.6%, in public consumption of 3.1%, in investment of 6.6%, with a 7.5% improvement in exports and 9.4% in imports for a trade balance of US $ 9.3 billion

Also guideline reduction of energy subsidies, up to 1.8% of GDP, an automatic fall due to the end of the incentive for gas production, inherited from previous management.

Official sources told the Télam agency that will sign up so that State transfers to these sectors do not exceed the 1,5% of the product by tariff segmentation of gas and electricity.

Regarding the fiscal deficit, for this year a primary red of 4% was redefined (from the original 4.5%), which will decrease again, to 3.3% in 2022. It is also expected next year a negative financial result of 4.9% of the product. It is expected that this deficit will be financed with a combination of credit and financing from the Central Bank, which for 2021 was 3.6% of the product, but for next year it will be reduced to 1.8%.

In the Government, they consider that with the guidelines of the 2022 Budget, the economy would be on the path of a “double recovery” that would lead to activity at the end of 2023 at similar levels of GDP of the last quarter of 2017.

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