Argentine economy minister Guzman sees no fiscal tightening in 2020

Argentine economy minister Guzman sees no fiscal tightening in 2020

Argentine economy minister Guzman sees no fiscal tightening in 2020

BUENOS AIRES (Reuters) – Argentina will have to grow its way out of its “virtual default” situation with production-oriented policies rather than push for more public spending cuts, the country’s new economy chief Martin Guzman said on Wednesday.

Latin America’s No. 3 economy was “extremely fragile,” Guzman said in his first news conference since taking office on Tuesday, promising to take a non-dogmatic approach to policymaking while maintaining a constructive relationship with the International Monetary Fund and other nervous creditors.

But he said Argentina’s current agreement with the fund had failed and would have to be revamped.

Argentina has said it needs to renegotiate about $100 billion in bonds and loans as the economy sputters and investment remains flat.

“The year 2020 is not a year in which fiscal adjustment can be made. A larger fiscal contraction would deepen the recession and aggravate the problem,” Guzman told a nation anxious for change as it faces expected 55% inflation this year.

Guzman, a 37-year-old academic with close ties to American economist Joseph Stiglitz, will be tasked to navigate restructuring talks with international bondholders and the IMF over its $57 billion standby loan agreement.

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Source : Reuters Link

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