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Martín Guzmán once again contradicted Cristina Kirchner: "The fiscal deficit does matter to lower inflation"


The former minister revealed that he has not spoken with the vice president since four days before the signing of the agreement with the Fund.

 More than eight months after leaving the Government, the former Minister of Economy, Martín Guzmán, spoke of the agreement with the International Monetary Fund (IMF), of the economic situation and again marked his differences with

Cristina Kirchner

when analyzing the causes of the inflationary escalation.

It is that the vice president, in her recent presentation in Río Negro, had made reference to the countries that had fiscal deficits and a low inflation rate.

The maneuver was a bit to refute those economists who point out that it is one of the factors that causes the cost of living to rise.

The fiscal deficit does matter for inflation in a country that does not have sufficient access to credit and that has a very weak currency

, a bi-monetary economy, which causes pressure on the exchange rate and, therefore, more inflation ”, Guzmán responded, for his part.

However, the former head of the Palacio de Hacienda clarified that the deficit "is not the only cause."

"You can lower the deficit and have more inflation, in fact that is what has been happening and happened during the administration of the previous government," added the former official.

When explaining the reasons for inflation, Guzmán raised the government's decision to issue currency with a shortage of reserves.


Issuing a currency that people do not want

(in reference to the peso), that is the bi-monetary economy, and that gives you more pressure on the exchange rate and more inflation."

“It is important to order the public accounts, to converge towards a balanced situation and also to take into account the circumstances that arise.

Nor should you be dogmatic and always say yes or if you have to lower the deficit, no.

Neither that.

But Argentina needs to go down that path together with a productive path”, said the former minister.

Guzmán also indicated that "

it will be important to define the exchange regime so that Argentina can have a greater capacity for

international reserves."

"This year, due to the drought, it will not be possible to do it, but it will be important that it be achieved over time," he added.

News in development

Source: clarin

All business articles on 2023-03-18

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