Argentina budget targets 4% growth in 2022, assumes IMF deal

September 16, 2021

By Lucila Sigal and Jorge Iorio

BUENOS AIRES (Reuters) -Argentina’s economy is predicted to grow 4% in 2022, while inflation is expected to hit 33%, according to a draft budget released just before midnight on Wednesday that lays out the embattled government’s economic roadmap for next year.

The draft, which must be approved by the country’s Congress, also pegged the key fiscal deficit number at 3.3% of GDP, as the South American grains producer grapples to claw its way back to economic growth while dealing with a large pile of foreign debt.

The midnight budget came the same day as Argentina’s Peronist government was shaken after several hard-left ministers offered their resignations, signalling a rift within the ruling coalition after a bruising primary election loss.

The government of center-left President Alberto Fernandez was badly beaten on Sunday in an open primary election, seen as a reliable indicator ahead of a midterm congressional vote in November where the ruling party could lose its grip on Congress.

Fernandez, who met with loyalist ministers on Wednesday to rally support, will need to decide whether to accept the resignations of ministers and officials allied with his divisive but powerful Vice President Cristina Fernandez de Kirchner.

At an event on Wednesday, President Fernandez said that the budget assumed the country would strike a deal with the International Monetary Fund to revamp some $45 billion in repayments it cannot make and that he would push forward talks.

“We present the budget assuming that next year we do not have to meet external commitments,” he said. “But that requires continuing the negotiation with the Fund and achieving it.”

(Reporting by Lucila Sigal and Jorge Iorio, writing by Dave Sherwood; Editing by Christian Schmollinger and Chizu Nomiyama)

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