Minister of Economy of Argentina resigns from the position; leaves the country with high inflation and problems paying its debt

Reuters.- The Minister of Economy from Argentina, Martin Guzmansubmitted his resignation this Saturday in the midst of a dispute in the ruling coalition, which could aggravate financial difficulties and accelerate the discharge inflation from the country.

The decision took the centre-left government of Alberto Fernandezwhich is going through its lowest levels of approval after taking office at the end of 2019. economistfrom the direct kidney of President Fernández, was going to travel to France on Monday to renegotiate a debt with the Paris Club.

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Amid the general uncertainty, his possible replacement is still unknown. “We have to wait,” he replied. Reuters a presidential spokeswoman.

An official source reported that, knowing the resignation, Fernandez He summoned members of his cabinet and political allies to an emergency meeting at the presidential residence in Olivos, in the suburbs of Buenos Aires.

“With the deep conviction and confidence in my vision of the path that Argentina should follow, I will continue working and acting for a more just, free and sovereign country,” said the former minister. Guzman in a letter addressed to the president that he published on his Twitter account.

Experts hope that Argentina register inflation above 70% in 2022, one of the factors that explains the investor distrust that led to a 13% drop in sovereign bonds in June.

A government source confided to Reuters that the output of Guzman of the cabinet was due to the lack of political support felt by the now former official to deepen a series of measures, just at a time when the 11EMJ country risk marked its all-time high.

Guzman represented the most “rational” faction of the ruling party’s economic team and faced criticism from members of the Frente de Todos who demanded a greater presence of the State in the economy and raise public spending. Among them, the powerful vice president, Cristina Fernández de Kirchner.

For this reason, the resignation of other officials of the Treasury Palace is also expected, all close to the hitherto minister, who assumed the portfolio in December 2019 with the parchments of a doctorate at Columbia University under the direction of the Nobel Prize in Economics Joseph Stiglitz.

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“It is the cronicle of a foreseen death. Since the loss of last year’s legislative election, (vice president) Cristina (Fernández) and her entourage have been demanding the minister’s resignation and obviously this also highlights the president’s increasing loss of power,” he told Reuters Mariel Fornoni, director of the consulting firm Management & Fit.

Analysts pointed out that the resignation shows a deepening of the dispute between the president and his deputy, who have practically no dialogue. Fernández de Kirchner, who dominates a large part of official Peronism, had chosen in 2019 Alberto Fernandez as a presidential candidate.

“An exit like this was not planned (…) Cristina (Fernández) may be celebrating now, although she has to be worried,” said political analyst Marcos Novaro.

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The resigning economist, 39, was key in a recent agreement between the country and the International Monetary Fund (IMF) for which 44 billion dollars in unpayable short-term debt were renegotiated.

Argentina promised to him IMF to add reserves, reduce the monetary issue, reduce the fiscal deficit and remove energy subsidies, among other measures, which in the opinion of many analysts will be unlikely to be achieved.

Financial operators consulted by Reuters did not rule out that on Monday the peso ARS=RASL reflects greater weakness due to the departure of Guzman and that assets fall due to sales orders that were already skyrocketing despite the holiday in the US market.