Guzman: "Keep getting out of a space of common sense"

Economy Minister Martín Guzmán warned that taking short-term measures “ends up generating crises,” and considered it necessary to have “common sense about what works and what doesn’t” in the country.

“Doing things that have a short-term focus end up generating crises. That is what we seek to avoid,” said the official in a new meeting with businessmen, this time from the United States Chamber of Commerce in Argentina.

In this framework, he evaluated: “Something that in Argentina has been very difficult to build but that we must build, and that today is part of the Government’s actions, is a common sense about what works and what does not. So, save us from leaving a space of common sense, either on one side or the other”.

Guzmán participated today in the AmCham Summit 2022 forum and, among other topics, referred to inflation: “It has been present in most of recent Argentine history and has to do with a set of factors that make the economy behave in a very restless way. Restless, and not in a good way.”

In that sense, he considered: “To attack inflation, it is necessary to attack the multiple causes that generate it. And this is done in the first place with a consistent economic program and then by connecting the short term with the medium term.”

Regarding the fiscal situation of the country, the minister affirmed that “we must act seriously”, after which he indicated: “Should Argentina put its public accounts in order? Yes, it must. Otherwise, we will always have debt problems or a weak currency. Is it possible to reach a situation of fiscal balance in a year? Well, unless there is a shock of good luck, this would not be possible because it would imply destabilizing the recovery”.

On monetary policy, he said: “It must be consistent. For a long time there have been situations where the Central Bank systematically finances the Treasury. And in a bi-monetary economy as we call it in Argentina, that is a problem. That is why it is so important that this will be reduced in a feasible way, and along with it, a structure of real interest rates that encourage the demand for assets in our own currency”.

“There is little trust in the local currency and many decisions or transactions are made in foreign currency. You have to build trust,” he added. For Guzmán: “What is needed is to anchor expectations more. Building trust is fundamental and there are no stories here. Seeing is believing. Too many times grandiose things have been said that have not ended up working and today we are in times of seeing to believe. And to see you have to do”.

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