Minister Guzman’s initial guidelines

An integral macroeconomic plan will be established to preclude further economic downfalls, fight inflation, revert fiscal imbalances and solve the situation of virtual default the previous administration has left. He will pursue fiscal and trade surpluses for the establishment of a sustainable project with social inclusion.


Continue negotiations with the IMF to obtain a modification on the external debt’s profile. Create a unit that will deal with external public debt sustainability, together with a committee that will grant advice made up by former Finance Secretaries.


No fiscal adjustment will take place in 2020 ‘we do not have the required financing for fiscal deficit expansion. There is an evident in sustainability of the public debt.


There is no margin for monetary issuance ’wanting to finance the fiscal deficit with strong issuance would be destabilizing.


A project of law will be sent to Congress to help those most vulnerable, the so called ‘Solidarity and productive reactivation’. It would include an extraordinary senior citizen’s payments hike for only the lowest allowances.  


The Minister did not outline details of these guidelines, but it appears that his main aim is to stop the economic downturn, aiming at a fiscal equilibrium, fighting inflation in an integral way and renegotiating public debt amicably. This project of law to be sent to Congress should tend to give relief to the most vulnerable layers of the population, having as reference Budgetary restrictions. It could include a change in the way senior citizen’s payments are indexed.


In the next few weeks / months we will have further details of this Minister’s plan, in the meanwhile, capital controls place a lid on the price of the US dollar, which is so significant for the fixing of prices and their stabilization. Lower interest rates and subsidized credit should give relief to SME’s. Hikes in pensions and public workers should also help these society layers. These are initial steps.