With Guzmán’s background still shrouded in mystery, the opposition is demanding “realistic numbers” to vote on the budget

Chamber of Deputies
Chamber of Deputies

Amid growing tensions between the ruling party and the opposition over the criminal case against Cristina Kirchner and the impeachment bid against Alberto Fernández, the Frente de Todos is preparing to debate the 2023 budget in Congress. It will be ceremoniously presented on September 15 in the House of Representatives.

Passing the “law of laws” has been a priority for Economy Minister Sergio Massa ever since will try to send a clear signal of economic direction to keep markets calm and build predictability for the year ahead. In addition, it will serve to reorganize the state administration, which has worked this year after the rejection of “Together for Change” with an extension of the 2021 budget and corrections made by decree.

Sergio Massa and Alberto Fernandez
Sergio Massa and Alberto Fernandez

Next week, in a special session convened for Wednesday 31, the Frente de Todos will test its ability to strike agreements with the provincial blocs and preview the tone in which Together for Change will deliver its critiques of the economic plan. in the previous The PRO MPs have proven to be pretty tough.

The opposition coalition has already announced this will vote against the fiscal consensus because it implies “an increase in taxes” and proposed significant changes in the extension of a tax package (Acquisition, private assets, monotax, cheque, special sales tax calculation).

“If they are reasonable, there should be no problem for approval”, remarked one of the MEPs of Together for Change, who is the most listened to on economic issues. The warning relates to the December 16 meeting of last year, when “Together for Change” plus the federal interbloc, the Left and the Liberals added 132 votes to reject the budget.

At the time, inflation and growth forecasts were too far from reality for the opposition. “We didn’t set the bar that high. We just wanted a budget well done. Guzmán had 33% inflation and we are already over 70%”called back another MP. Finally, Máximo Kirchner’s strong speech triggered the precarious agreements and the session was a failure for the ruling party.

The opposition is now “anxiously” waiting for the text to arrive and has announced that it will not just wait for the inflation figure calculated for next year. The other items they will pay particular attention to are reducing the budget deficit and financing that deficit (which means no increase in inflation).

After consulting Infobae, they did not rule out another dissenting vote if the macroeconomic indicators are not realistic and it is ensured that the state can continue to function with the extended budget, since it has been changed by decree. For example, when they claim “realistic” numbers, they cite BCRA’s Survey of Market Expectations (REM) as a benchmark that marks Inflation will fall from 90% this year to 76.6% in 2023 and 60% in 2024.

The 2022 budget was rejected by the opposition (Maximilian Luna)
The 2022 budget was rejected by the opposition (Maximilian Luna)

In any case, they speculated in the opposition faction that the government doesn’t have much room to maneuver due to pressure to honor deals with the IMF. Specifically, a reduction in the primary deficit from 2.5% of GDP to 1.9%, a monetary emission ceiling of 0.6% of GDP and the accumulation of reserves of USD 4,000 million.

Although it is common for the opposition to almost never reject the incumbent government’s budgets, last year set a bad precedent. The current political context is also not helping to calm things down. In the face of a Together for Change intransigence scenario, the ruling party must reach an agreement with the Federal, United Provinces, Ser and Neuquén Popular Movement blocs. Something that failed last time.

CONTINUE READING:

With differing opinions, the ruling party and the opposition are preparing to expand the tax to include cheques, personal property and other taxes
In search of new investments and before traveling to the United States, Sergio Massa has dinner with the G7 ambassadors

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