Wednesday, April 24, 2024

ECONOMY | 04-07-2022 22:17

Silvina Batakis sends message to markets as she’s sworn-in as economy minister

Argentina’s new economy minister Silvina Batakis says she believes in “fiscal balance” and says Argentina needs “more exports” and to “revalue our currency.” Vowing to talk to the IMF soon, she says that the government's segmentation plan to alter subsidies for public utilities will continue.

Silvina Batakis has vowed to maintain Argentina’s economic programme after being sworn-in as the country’s new economy minister.

Batakis, 53, took the oath of office at the Casa Rosada on Monday after a weekend of political turmoil that underlined divisions in the ruling Frente de Todos coalition. The ceremony was brief and symbolic, with neither the new official nor President Alberto Fernández delivering a speech and there was not a single mention of outgoing minister Martín Guzmán, who resigned his post on Saturday.

A host of key ministers and government officials were in attendance, though notably Vice-President Cristina Fernández de Kirchner – who has been fiercely critical of the government’s economic policy – was not present.

Batakis, who until Sunday served as secretary of provinces at the Interior Ministry, did offer brief comments to the press later at the Patio de las Palmeras in Government House, though she refused to take questions from reporters. 

"I believe in fiscal balance and I think we have to move in that direction. And in the liberation of all the productive forces of our country," said the new minister, who said that she is “convinced that Argentina's direction has to do with the fiscal management of our accounts.”

"We must ensure that Argentina has more exports and revalue our currency, generate more jobs throughout the country and have a general outlook that includes all Argentines. This can be achieved by obtaining more [foreign currency] reserves," hse said in a message clearly aimed at reassuring the markets.

Argentina’s parallel black-market exchange rate, the so-called ‘dolár blue' rose to 280 pesos per greenback on Monday in response to Guzmán’s departure as citizens rushed to buy US dollars, though it calmed later to 260.

Batakis also said that she would maintain “the economic programme that the president has been setting out.”



Later on Monday, Batakis began to give her first definitions of economic policy. Speaking to the pro-government C5N television news channel in an interview, she confirmed that the government’s new segmentation plan for public utility subsidies would continue.

"The segmentation of tariffs is maintained," said the new minister. "Just as the reserves must be there for the betterment of all Argentines, the pesos must also be there for that. We need those who have the capacity to pay to take full responsibility and redistribute resources within the budget.”

She continued: "I am convinced that Argentina's reserves must be available for growth. At some point they will have to be used to import more capital goods. We have to plan and be efficient. In Argentina we have been used to not planning for many years, and we have to do this planning together with businessmen. We have to plan the use of reserves for the good of all Argentines, it is not just a question of the market."

Batakis also said that she would make contact with the International Monetary Fund on Tuesday. Speculation has increased in recent days that Argentina may seek to renegotiate the targets in its US$44.5-billion debt refinancing deal that was signed back in March.

Responding to a question on price increases, which have jumped by more than 60 percent over the last 12 months, Batakis agreed that "inflation is eating away at the lives of Argentines and does not allow us Argentines, businesses and the state to plan ahead.”

"The truth is that we are living an unprecedented situation worldwide. Inflation has tripled in the world and Argentina is not exempt from that. What we want to do is to begin to correct this problem. There are situations that are more complex than others, but Argentina is the country that grew the most last year and continues to generate jobs and require foreign currency," she said.

"We have to address all the instruments and in the medium term we will manage to converge with fiscal balance and a state with orderly accounts, that will help us to have a more orderly country in terms of inflation," said Batakis, a former economy minister of Buenos Aires Province.

The new minister added that "the driving force of the economy throughout the world has to do with consumption" and said "a rise in wages” would be “very good for the whole country." In relation to the impact that this could have on price rises, she said that "wages are not inflationary."

When asked for her opinion on calls for the creation of a universal basic wage, the minister considered that in the current state of the world economy it is an issue that should be discussed, although she stressed that so far it has not been implemented by many countries worldwide. 

Batakis also said that she had a dialogue with Fernández de Kirchner about her intentions while in office, adding that the vice-president had congratulated her on her appointment.



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