While the negotiations between the Government and the IMF for the purposes of a more flexible agreement and possible announcements on this matter are not excluded, this Monday, a private report analyzes the impact that this review can have on the Argentine economy.
THE IMF AGREEMENT: A WARNING OF THE CONSEQUENCES IN ACTION
According to a study by the General Mediterranean Foundation, the new proposals “will not guarantee an improvement in economic prospects”. Since they are mainly tied to subsidies, they argue that a “short blanket” can reach the sphere of economic activity, “because of the lack of inputs and parts.”
In this regard, the report highlighted that with the first two months of 2022, “the CIARACEC export association reached 4.94 billion current dollars, in the same period of 2023 the income of foreign currency through this channel up to 1.57 billion, a decrease of almost 3.4 billion dollars, attributed to the temporary change, which “soybean dollar “he uses
“Although Argentina does not have to comply with the letter of what is initially committed in the collection collection terms, the expectations of financial agents will continue to be affected by the fragility of the Central Bank’s balance sheet, with foreign assets decreasing and local currency liabilities expanding at full speed,” he explained.
In this sense, from IERAL they stated that the “short blanket” restricts the authorities to continue importing and therefore affecting the progress of the activity due to the lack of inputs and parts. “Toward the end of 2022, we estimated that non-energy imports could fall by 10% year on year in 2023, and all the developments that have happened in the last two months are not enough to change this scenario, which is clear. It entails a marked adjustment in activity.”
While officials are waiting for information on the new IMF matching program, the study estimated that the relaxation of the proposed reservation would avoid a “failure” in this area at the time of the first quarter review. “But this punctual event makes it difficult to widen the scope for economic decisions this election year. The external imbalances of the economy are a reflection of the macro imbalances, and what has been observed in recent areas is rather the search for financing, but not the correction of the contradictions”, which is the consideration.
“In 2023, not only will there be a loss of perhaps more than 13.0 billion dollars in agricultural harvests due to climatic factors; there will be a negative balance in credit operations with institutions while, in external commercial loans, the figures of 2012 cannot be repeated, beyond what is possible in negotiations with China and Brazil,” added IERAL.
“For this year, the fact that the IMF agrees to relax the support targets will not contribute much to the expectations. The numbers of the foreign sector are so tight that even with the end of the reserve collection only having evidence, in any case, there will not be enough foreign currency to meet the level of cash imports that were recorded in 2022. The lack of inputs and parts has already begun to affect the operative activity of the producer and in no way prevent this phenomenon from dominating the mission in 2013, the report concluded.
vestibule
When analyzing how the activity could develop this year, after registering an annual growth of 5.2% 2022 EMAE, the consultants who participated in the REM presented a real GDP variation of 0%, reducing their forecast with respect to the price. was contemplated prior to the survey at 0.5 pp *
In this scenario, the General Activity Index prepared by the consultant Orlando Ferreres registered an annual growth of 1.8% in January and a contraction of 1.2% in a temporary measure compared to December. “It is worth clarifying that the measurements of the first two months of the year are subject to greater volatility than the rest of the year, so that the drop in the first month is not representative of the trend ahead of the rest of the year, which is an act of activity with a slightly negative trend”, he highlighted from the firm.
Ecolatina, on the other hand, pointed out that “one of the main things that will negatively affect the GDP will be the drop in the volumes of agricultural production due to drought and frost (early and late)”.
“Furthermore, the management system for foreign exchange will hardly be maintained, where import controls will continue (or even increase), putting a limit on the potential expansion of production and consumption, through complications in the supply of inputs and final goods.” They expressed a firmness.
