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“Investment in infrastructure is necessary to settle the social debt of the country”, Minister of Finance said

In a conversation together with his peers of the region, Caputo talked about the policies implemented to normalize the economy and foster growth.

The Minister of Finance, Luis Caputo, participated yesterday in the panel “A Conversation with Ministers of Finance from Latin America: The Future of Latin American Fiscal Policy and Growth”, organized by the Center for Global Development.

The participants of the panel talked from their local point of view about common issues of regional impact such as the situation and the challenges faced by fiscal and financial policies of the region.

In his speech, Caputo talked about the international financial context and he said that Argentina is well positioned: “As long as we meet fiscal targets, we will be able to neutralize any increase in interest rates”, he highlighted. In addition, Mr. Minister said: “We are working to depend less on international financing and more on ourselves”, and he added: “We know we have chosen the right path”.

Regarding the macroeconomic and financial context of the country, Caputo explained: “We have inherited a country with a fiscal deficit of more than 5.5 percentage points, undercapitalized, in default and with a poverty rate of 30%. Today, we are normalizing the economy, with a balanced budget, with clear rules and an intelligent insertion into the world”. In addition, he highlighted that in order to achieve balance, Argentina first had to settle the conflict with holdouts: “It opened us the possibility of financing and we are doing it at the lowest rates in history. Last year, our average rate was of 4.2% in dollars”.

“We needed to reduce our fiscal deficit on the one hand and invest more in infrastructure on the other hand because we needed to settle that social debt. That is the reason we have chosen a gradual path to achieve said balance”, the Minister of Finance explained.

Caputo highlighted the leading role of the Public-Private Partnership scheme (PPP) to finance infrastructure and meet fiscal targets: “We have more than 60 projects in the pipeline for almost 30 billion dollars which will be executed in the next four years. This almost doubles the investment in infrastructure”.

Likewise, he talked about the tax reform conducted in Argentina and he explained that the “work done is remarkable because we are reducing fiscal deficit at the same time that we are lowering taxes and investing more in infrastructure. The best way to fight informality is to simplify the tax regime”.

Finally, the Minister of Finance focused on recovering the credit, not only for the country, but for the people and SMEs: “Our main goal is to make credit available for everyone at reasonable rates and terms; it is something we have to do if we want to have a sustained and inclusive growth”, he said.

The other participants of the panel were: the Minister of Treasury of Colombia, Mauricio Cárdenas; the Minister of Treasury of Paraguay, Lea Giménez Duarte; the Secretary of Treasury and Public Credit of Mexico, José Antonio González Anaya; and the Minister of Treasury of Chile, Felipe Larraín Bascuñán.