Sergio Massa at the presentation of the 2023 budget in the Chamber of Deputies l HCDN

The inflation August of 12.4% and of the 15.6% food They were a huge blow to the pockets of the workers after the devaluation that Massa applied for the Fund. In his role as candidate, the Minister of Economy announced a series of measures to contain the impact of the jump in the dollar, such as changes in Profits for a sector of the working class (a historic demand since Salary is not Profit), a fixed sum, VAT refund with a monthly limit. Measures for the electoral campaign, as former President Macri also did after his defeat in the 2019 PASO, but which do not allow us to recover everything lost in these years.

These announcements were not liked by the United States. The US Undersecretary of the Treasury for International Affairs, Jay Shambaugh, stated that “the IMF must be willing to withdraw its financing if a country does not take the necessary measures,” when speaking before the Center for Global Development. Blackmail from the north despite the fact that the minister complies with the Fund’s requests such as the devaluation after the PASO. However, Massa in these months is trying to reduce the gap with Javier Milei, to be in the race for a second round and his latest measurements point to that. The next review of the IMF will be in November, perhaps in the middle of the runoff, but it will take an eternity to reach that month given the current situation.

Hit the pocket

In August there was a lot of month left over at the end of the salary and September anticipates that it will be similar. It is not a sensation, it is the loss of purchasing power. According to a CTA Cifra report, If the food purchasing power of the registered salary is measured, a drop of almost 8% is observed between December 2019 and June 2023 during the Frente de Todos Government. “This salary measured in food is thus 25% lower than that of December 2015,” the document adds. The situation is more serious for informal workers whose loss of purchasing power was greater.

Cifra also evaluated the impact of the fixed sum of $30,000. Only for the 50% of those who earn the least would they compensate for the September price increase and only for the 25% who earn the least could the inflation of August and September be equal.

For lower-income sectors, the deterioration in purchasing power is alarming. So far in 2023, the Minimum Living and Mobile Wage has lost almost a third (-32.7%) of its purchasing power compared to the 2015 averageand in relation to December 2019, in August it was almost 8% below. The Potenciar Plan is half the minimum wage, and approximately 67% of the total active holders are women. While, The purchasing power of the Universal Child Allowance fell 35% in the average of the first eight months of 2023 compared to 2015, according to Cifra data. There is a sharp deterioration in the income of the popular majorities, which is why official measures have little effect. The “last” were not the “first” as this Government repeated.

Budget 2024: dead paper and the Fund’s goals

Late on Friday the Government sent the draft Budget 2024 to Congress, although it would be discussed after the general elections as requested by candidate Javier Milei. Another official concession to the so-called libertarian, who boasts of promoting greater adjustment. The project could be a dead letter if the candidate minister loses the elections and the Budget fails in Congress due to the uncertainty due to the change of political sign and the transition.

The Budget sent to parliament provides for fictional targets such as inflation and the projected exchange rate. For 2024 consider a inflation in December of 69.5% year-on-yearand dollar a $607 y a recovery of the economy of 2.7%. It is worth remembering that in the 2023 Budget (already with Massa as Minister of Economy) a GDP growth of 2% was projected, an inflation of 60% (December year-on-year), and a dollar at the end of the year of $269.9. In the 2024 project, they recognize for 2023 a drop in the economy of 2.5%, inflation at the end of the year of 135.7%, and an exchange rate of $365.9. In Creole, they didn’t hit one.

It is no coincidence to include low inflation as several governments did. The items of each Ministry and public area depend closely on the purchasing power of each peso they receive, which is why the inflation data is important, so that their real power is not liquefied, as happened this year with items such as AUH, retirements, among others. others.

The Government seeks to hide the adjustment because income and expenses exceed the projected year-end inflation. But The Budget ratifies the fiscal deficit goals requested by the IMF. The project foresees a primary fiscal deficit (without considering debt interest) 1.9% of GDP for this year and of 0.9% for 2024, as agreed with the Fund and included in its latest staff report. The cut in energy subsidies was also incorporated as requested by the multilateral organization.

Staff Report FMI
Staff Report FMI

Las main adjusted items in 2024 In real terms considering the average inflation of the budget (97.34%) for next year, they are: Education and Culture (-2.35%), Housing and Urban Planning (-0.71%), Drinking Water and Sewage (-0.60%), energy subsidies (-17.75%). If they take a higher inflation rate as calculated by the Market Expectations Survey published by the Central Bank (124.7%), they lose in real terms Health, Education, Housing, Social Security Benefits (retirements, pensions), among others.

In the case of the items for ministries in 2024 with an inflation of 97.34%, there will be a loss in real terms in the ministries of Women, Gender and Diversities (-13.85%), Environment and Sustainable Development (-5.33%), and Social Development (-6.86%)among others.

For next year are allocated for Public Debt Services [1] $6,496,376 million. Although it decreases in real terms in relation to 2023, The amount allocated to the debt represents 2.5 times the expenditure on health and 8.8 times the expenditure on Housing and Urban Planning.

The debt is once again a mortgage on the backs of working people. The Fund, with the reviews it carries out on the Argentine economy, has the power to control the country; speculators also do business with the debt. Last week, the Democratic congresswoman of the United States, Alexandria Ocasio-Cortez, denounced that Justice Samuel Alito of the United States Supreme Court, whose ruling favored the vulture funds, has a friendship with Paul Singer, head of the NML vulture fund. . Alito shared a fishing trip with Singer in 2008 and all expenses were paid for by Singer. Mauricio Macri was the one who decided to pay everything that the vultures demanded with the endorsement of Congress, and the support of Peronism, including Sergio Massa. Paul Singer’s NML fund returned 1,308% on invested capital. Despite the complaints of the Frente de Todos about the irregularities of the debt, it decided to recognize this scam.

The main candidates agree on honoring the debt. Only the Unity Left Front proposes another solution: the sovereign debt ignorance based on worker and popular mobilization; and a program of economic and social reorganization for the benefit of the popular majorities.

[1]: Excludes interest paid to assets of the National Administration in the possession of National Administration organizations, mainly FGS.


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