Argentina Economy Minister Martin Guzman steps down
July 3, 2022
Argentia's Economy Minister Martin Guzman stepped down from his post on Saturday, publishing his resignation letter on Twitter.
Addressing President Alberto Fernandez, Guzman said: "I am writing to you to present my resignation as economy minister... which has been my honor since December 10, 2019."
He called on the president to mend internal divisions so that "the next minister does not suffer" the same difficulties he did.
As economy minister, Guzman was in charge of renegotiating a $44 billion (€42.19 billion) debt with the International Monetary Fund that Argentina insisted it could not afford to repay.
Despite internal divisions within the government, perhaps most notably opposition from Vice President and two-time head of state Cristina Fernandez de Kirchner, who leads the far-left wing of the ruling coalition, Guzman managed to secure a deal and save the country from defaulting.
Argentina struggling badly with inflation and currency woes
The resignation comes at a time when the nation's economy is staring at multiple challenges, from soaring inflation and a depreciating currency to critical shortages of items like diesel and fertilizers.
The Latin American country, which has the region's third-biggest economy, currently has the second-highest inflation among major economies behind Turkey, at about 60%.
Authorities forecast that it will hit 70% by the end of the year.
Meanwhile, pressure on its peso currency is rising and a high energy import bill is stopping it building up vital dollar reserves.
The situation has placed the nation's central bank in a tough spot. If it tightens monetary policy hard to stem price rises and support the currency, it will likely risk economic growth.
The interest rate has already climbed to 52% in a bid to avert investors dumping peso assets.
In a further sign that investors believe another Argentine default is likely, the returns on government bonds are among the highest in the world.
Farm sector under strain
The country's key agriculture sector is also under strain due to critical shortages of items like diesel and fertilizers.
Major farm groups have called for a trade strike in two weeks in a bid to pressure the government of leftist President Alberto Fernandez to do more to boost supplies.
The groups announced that the nationwide halt to farm exports will begin on July 13 and last 24 hours, according to sector officials and a statement from the Mesa de Enlace which includes the country's four main rural associations.
Argentina is the world's second-biggest corn exporter, the No. 1 exporter of processed soybean oil and meal, as well as a major wheat and beef supplier. The country has been hit by economic crises, defaults and rampant inflation for decades.
sri/msh (AFP, Reuters)