Last Monday there were three collection dinners to which businessmen from the most powerful in the country attended. In the halls of power skepticism was the common denominator of conversations. A report from the Mediterranean Foundation puts it in this way: due to political conflicts and their own mistakes, the road to October was “steep”
The economy feels the blow of the monetary squeeze, they say that it accumulated five months of fall and in the government recognize that the restriction will not loosen at least until the beginning of November. Economy Minister Luis Caputo, in 2018 mode, goes out to sell dollars, entrepreneurs ask for more structural reforms but President Javier Milei has less and less governance.
The Casa Rosada continues with concern the climbing of the exchange tension of recent days. In the market they make accounts and speculate that The treasure sold more than US $ 2550 million only on Friday’s wheel. In the last week the number of dollars slaughtered by Caputo would exceed US $ 540 million, according to estimates by economist Luis Secco.
If so, the treasure would have about US $ 1,126 million in your account to intervene in the market. The pressure on the exchange rate completely bursts the expectation of the productive sector of a relaxation of the monetary tight before the October elections. Government sources confirmed to the scope that the restrictive policy will continue at least until that time.
The scheme has an impact on the real economy. According to the PBA PBA indicator that the province bank prepares as an advanced thermometer, The activity fell 1.4% during August in Buenos Aires and Not only accumulates five consecutive months down, but it is already slightly below the same month of the previous year.
The level of rates anticipates that the situation hardly improves this month. Labor conflicts with suspensions, dismissals or closing of factories intensify in the industry. The textile entrepreneur Marco Meloni considered that this level of rates is the “final hammer” for all manufacturing SMEs.
EMPINED WAY
The Ieral of the Mediterranean Foundation put much of what is conversed in the circles of power. “The road to October was steep,” says the report that the signing of the former Anses, Osvaldo Giordano, that directs the Think Thek financed by the great Argentine companies. In that sense, he anticipates that a “Crystal roof”in reference to an environment that prevents the sustained expansion of production.
On this point he says that different adverse conjunctural factors converge. “Politically, the proximity of the elections increases instability and pushes economic agents to extreme caution. Economicthe errors and contradictions in the disarmament of the Lefi enhanced the confusion and uncertainty. The external front does not add new news, but neither does it offer tranquility, ”he explains.
For the economist Cordoba, interest rates were raised to extreme and unsustainable levels for content the exchange rate and this credit cost “Not only is an additional lock to production introduces, the main support of the economic program that is fiscal balance is also eroded.”.
After October?
Giordano’s conclusion is that the balance of public accounts is a necessary condition, but not enough to break the “glass ceiling”: without strengthening the capacity for administrative and political management, tax progress is not supported. The term that is most heard in the pink for the second stage of the government is “Structural reforms”.
But the truth is that even if you have a good choice in October, The government is far from reaching consensus for great caliber modifications in the pension, labor or tax level. Closer is the possibility that the projects promoted by the opposition to regulate the use of decrees advance and that Milei no longer reaches the third of heroes to govern for DNU.
Source: Ambito
