Economy Minister Sergio Massa was at the G20 Summit of Finance Ministers and Central Bank Presidents that took place in India. The official held bilateral meetings with several countries, the World Bank and the IMF in search of, in addition to credit support, to show clear support from the international community for his administration at the head of the Palace of Finance, at the beginning of an electoral campaign with uncertainty as to whether the Tigrense finally competes.
When the economic team returns, they will have to face the complex domestic context: inflation that does not subside and the reserves of the Central in alarm in view of the review corresponding to the first quarter of the year with the Fund.
Sergio Massa’s first bilateral meeting was with Jay Shambaugh, Undersecretary for International Affairs of the United States Secretary of the Treasury. The axes of the meeting were the international financial situation, the advances in the economic program and the revision of the agreement with the IMF, as indicated by Economy.
In addition, they talked about the impact of the war and the drought in Argentina. Other issues discussed were the need to find financing paths for middle-income countries and the impact on the global food security agenda caused by the drought that affects Argentina and other nations.
Then, he had a meeting with the Indian Finance Minister, Nirmala Sitharaman. Both have a common agenda that is based on the need to close the asymmetries
During the meeting with Wang Dongwei, Vice Minister of Finance of China, progress was made in bilateral economic and financial cooperation related to Chinese financing of infrastructure projects for development in Argentina and in alternatives for strengthening the country’s international reserves. On this last point, the Minister of Economy and the Chinese representative analyzed the evolution in the use of the swap in trade between the two countries. The head of the Central Bank of the Argentine Republic, Miguel Pesce, and the head of INDEC, Marco Lavagna, also participated.
Massa’s agenda in India continued, after his meeting with Kristalna Georgieva, with a second round of bilateral meetings, in this case with his counterparts from Brazil, France, Italy and Germany. In the bilateral that he held with his counterpart from the Brazilian Treasury, Fernando Haddad, with whom they analyzed the world problems and the positions of the region on the different topics of the G20 meeting.
In turn, Massa and Haddad worked to strengthen the integration between the two countries and the joint development of strategic projects, particularly in the energy sector. In this line, the Ministers agreed on the potential of Vaca Muerta and that the needs of the countries provided a complementarity that Argentina and Brazil should exploit.
New criticism of Monetary Fund surcharges
During Sergio Massa’s tour of India, the official criticized the IMF for not reviewing its surcharge policy and said that it is a “regressive decision, because it falls on countries with the greatest financing needs” such as Argentina.
In turn, he argued that “the already existing asymmetries in financing conditions between developing and advanced economies have been exacerbated by the tightening of interest rates in many advanced economies.”
According to Massa, this measure is also “pro-cyclical, because it further hinders the economy and the ability to repay and opaque, because countries rarely know that they will have to pay surcharges.”
On the other hand, the economic team presented a report on the impact of the war between Russia and Ukraine on the Argentine economy. It is expected that the economic team will probably use this argument in the need to ask for some type of flexibility regarding the fulfillment of the IMF goals for the first quarter of the year.
The war in Ukraine presented a deficit of US$ 4,940 million in Argentina’s trade balance, due to the rise in international prices. This is clear from a report released by the Palacio de Hacienda, which pointed out that this impact is attributed to a “general shock” of international prices in the agricultural sector with increases of 9.4% in soybeans, 33.7% in wheat and 17.8% in corn, and on the price of Bolivian gas fuels.
Regarding the fiscal impact of having to pay for the most expensive fuels, it was estimated that the transfers in concept of subsidies increase for this year to $1,799,286 million.
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