The former Minister of the Economy Nicolas dujovne defended the agreement with the International Monetary Fund (IMF) to which he arrived when he was an official of Mauricio Macri, felt that the current government does not have a serious program and that a plan to “put money in the pocket” of the population “does not is not consistent over the long term “.
The former official, who in 2018 granted the loan for 45 billion dollars with the IMF, reappeared after several years without making public statements. He stressed that “it is not the same thing to reduce the public deficit by normalizing rates, as it is to liquefy pensions”. He considered that the austerity in the accounts he showed Martin guzman in the first installment of 2021, it was “generated by the rising inflation”.
For Dujovne, Guzmán’s budget balance “is not the product of a structural adjustment policy. The liquefaction of public works and pensions funded increased grants. None of this is sustainable over time ”. Then the The main definitions of Nicholas Dujovne on the upcoming economy in an interview published this Sunday by the newspaper Bugle.
Inflation in 2022 will be higher than this year, warned Nicolás Dujovne
Although the former Minister of the Economy called for caution Faced with the threat of an inflationary acceleration after the November elections, he estimated that “no big changes in the credibility of “the Government’s economic program”, it should continue to be financed by monetary issues, which would lead to a rise in prices above the estimate of the 2022 Budget (33%).
“Inflation is surely higher than that of 2021,” he said. And he added that “the risk of fiscal policy worsening the inflationary situation is very close even when it occurs with lags,” he said.
And he added that “nothing is sustainable if it turns from year to year. It is not the same thing to lower the public deficit by normalizing the price of public services as by liquefying retirees as they have done now. The average number of retirements today is 10% lower in real terms than it was in August 2019.
Nicolás Dujovne disavows the “little money in my pocket” pre-electoral plan
Former minister Mauricio Macri pointed out that the government’s electoral defeat in PASO 2021 was unrelated to the failure to implement an expansive spending policy. “They were defeated by the absence of a coherent program and an acceleration of inflation between the end of 2020 and these elections with a rate above 50%, beating wages,” he said.
Consulted on the emergency measures who launched Let’s change after losing the August STEP 2019, and when he was no longer a civil servant, Dujovne declared that “from a fiscal point of view the measures of Macri they were not relevant”.
“There was a change in the VAT on milk, something with the non-taxable minimum income tax and not much else. Most relevant was the re-establishment of exchange controls. The electoral return after PASO for Macri had, in my opinion, nothing to do with tax measures that were ultimately harmless because we were aiming for a zero deficit and closing at 0.4% of GDP. The return was due to his approach to the people ”.
What Nicolás Dujovne said about the accounting maneuver to calculate IMF funds in the budget
For the former minister, the accounting maneuver by which the government integrated in the 2021 budget, the 4,334 million US dollars of special drawing rights (SDRs) that the IMF issued due to the pandemic, “is not something striking “.
“The easiest way to record this aid was as revenue from the treasury and use it to pay the IMF. But the BCRA is at the limit of Treasury funding and could only change this ceiling with a decree amending the Bank’s Charter. Instead, he made space with the money from the Fund, ”he said.
Dujovne warned in this regard that the accounting maneuver could lead to “more emissions, no more dollar spread and more pressure on the reserves ”of the Central Bank.
For Nicolás Dujovne “the program with the IMF worked”
The former head of the Palacio de Hacienda has defended that during his tenure and with the closure of markets, Argentina turned to the International Monetary Fund “as lender of last resort”.
The former head of the Palacio de Hacienda defended that during his tenure and with the closure of markets, Argentina turned to the International Monetary Fund “as lender of last resort” and argued that “it is not was not an electoral plan “.
“For me, the program with the IMF worked,” said Dujovne, who argued that “avoiding a default was very important to us”. He considered that “to say that the program didn’t work because they killed it when it started to work is epistemologically incorrect”.
“I think this administration (that of Alberto Fernández) had a huge opportunity to take advantage of what we had done and say ‘It seems good to us to converge on a balanced budget but we want to do it instead of reducing spending by raising taxes’, something I don’t agree with, but I think they would have done much better with that vision. The program was not down and even Argentina could have gone. send to the IMF when the pandemic started asking the IMF for the rest of the disbursement ”.
Regarding the rescheduling of loan payments of US $ 45,000 million that the Guzmán administration is facing with the Fund, the former official said that “for two years they have been going around in circles, why not finish closing a negotiation? which gives credibility to the government in the matter of its monetary and fiscal program? According to Dujovne, the government of Alberto Fernández “did not show up and did not seek to conclude an agreement until now”.
“You can accept if you have a good tax program. But he hasn’t shown up and hasn’t sought to shut down until now. This is my perception, I am not aware of the negotiations, but you can see that it has been two years and that there has been no progress. Putting a solid program on the table would have been a good way to strengthen the credibility of peso holders. Now, if this program is part of an agreement with the IMF, credibility can increase, ”he said.
Dujovne dismissed that “a national deal is necessary for the deal with the IMF, as they claim from the executive branch. “The Fund only wants political reassurance, so that the country will go in a direction compatible with a strong program and not what the opposition thinks.” And before the Front de tous’s 2018 debt criticism, he launched: “If the IMF is dedicated to harming countries while Argentina is leaving the institution. I did not listen to this proposal.
“The program Argentina requested and granted by the agency was correct. It was a decision on a program supported by the world in a country that was going in the right direction, that made the right policies, ”he defended himself.
Asked what he thinks are the reasons why the injection of money that the agreement with the IMF meant did not favor Macri, the former Minister of the Economy considered that “this confirms that he does not was not an electoral program.
“We decided that we had to do what was necessary to make the economy good again, just like Mexico and Portugal. You can’t save the ministry by thinking about the next month or quarter. have we lost? Yes, but we are not going to the government to win the elections, ”he declared.
What Nicolás Dujovne thinks about dollar stocks
Two years after the reinstatement of the exchange cap and the limitation of the purchase to $ 200 per month Per person, the former economy minister – who stepped down after Cambiemos’ defeat at PASO in 2019 – said the exchange control regime “is dysfunctional.” He considered that the return of shares had only started “when it was learned that a government was coming to restore control of capital”.
“It is very difficult for foreign investments to come in the long term with a scheme of this type. It serves temporarily, in the face of a big shock, but then you have to think about how it comes out. It can in no way be a permanent pattern, ”he added.
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