In a 15 -minute speech, the president Javier Milei presented the project of Budget 2026 that, among other things, provides for a Fiscal surplus for next year 1.5% of GDPan expected official wholesale exchange rate of $ 1,423 by the end of 2026, and a variation of the consumer price index (CPI) of 10.1%. However, There is a fact that caught the attention and ignited the alarms: the Government projects that the external deficit of goods and services extends up to 2028 inclusive.
According to the calculations of the Ministry of Economy, foreign trade and services will close 2025 with a deficit of US $ 2,447 million. The official projection anticipates an even greater red in 2026 (US $ 5,751 million), which would be moderated in 2027 (US $ 3,707 million), to go back to deepen 2028, with the worst result of the period: an imbalance of US $ 6,961 million.
An external deficit of goods and services implies smoothly that more dollars come out than they enter. When there is a lack of currency, and more before the bulky maturities in foreign currency, The country must resort to its reservations, seek to finance with debt or bet on the arrival of external investments. For this, it needs, among other things, a loss of country risk, to bet on the “role” of the debt, something that today looks very difficult, or an adjustment in the exchange rate that the band system does not allow today. Therefore, the roads seem to go to a dead end.
To try to unlock the possibilities, Scope chatted with Pedro Martínez GerberChief economist in PXQ Consultantwho said that “starting from the case of commercial deficit of the budget, It is necessary that on the side of the capital and financial account there will be foreign exchange entry (whether by public/private debt, FDI or portfolio investment) “. For this expert, the commercial deficit does not seem compatible with a closed debt market. “In other words, This country risk level is not compatible with a commercial deficitgiven the maturities next year. Unless they are thinking about An alternative currency income source“, complete.
The 2026 Budget, does it propose realistic scenarios?
For the economist Florencia Fiorentinin talk with this medium, the projection of the commercial deficit is due to the fact that A systematically greater increase in imports with respect to exports is expectedand this happens for two reasons: the estimate of economic growth and exchange appreciation. For this expert, if there is economic growth and the weight can be seen, The government could accumulate reservations, but warns that you have to see if that is enough to cover the deficit in the payment balance.
“Our vision is that the official projection on the exchange rate is unlikely. It would be fulfilled, the country’s risk and the debt load would raise, in addition to pressing on the reserves to the extent that they are used to intervene in the MULC in the face of a greater increase in the dollar”he warned. Asked about which alternative sources of financing the government could have, he added: “They always bet on rigi and the arrival of foreign productive investments; under the conditions they raise, it could be thought that the country becomes more attractive. But it is insufficient: in recent years the dollars entered more due to private indebtedness, debt emissions and whitish.”
Fiorentin did not rule out the possibility of the US to grant direct financing, although he clarified that it would be for moderate amounts and with high interest. He also recalled that the government projects a most optimistic scenario than the current one: ‘In its projections all that makes sense, but the problem is that if any of them fails -in particular the most delicate, which is the lack of foreign exchange for country risk or a commercial deficit greater than the expected one -, the impact is transferred in chain to the rest, as a domino effect ”.
Dollar: Lefis disarmament and lack of reservations
Guido Zack, director of Economy of Fundar, considers that to understand the current situation it is necessary to review first how this point was reached. For this expert, the economic plan laid some important bases such as the budget balance and the interruption of monetary financing to the Treasury. But, in April of this year, The government planned the flotation system between bands and the relaxation of the stocks Although, as Zack warns, the discussion of whether was done with a very low exchange rate arises.
“It was not noticed at the beginning because the agreement with the IMF and the US $1,000 million came and also because it was full harvest season”he recalled and added: “Once the settlement is finished together with the unpaired error of the elimination of the Lefis, a cocktail was generated so that the exchange rate passes from being below the average of the bands to be above the average of the bands. And after electoral setback already attached to the upper band“
This scenario aggravated the shortage of dollars, making it difficult to accumulate reserves and generating deficit in the structural current account. The Government He tried to maintain a low exchange rate to contain inflation and sustain the economy, but did not accumulate reservations during moments of abundance of dollarsZack remarked. Now, “the financial market distrusts the ability of the Argentine State to fulfill its commitments and closed the financing, which deepened the crisis, he completed.
“This resulted in a reservation problem and a scenario where the economy needs external financing, which is hardly coming”he described. In the short term, The challenge will be to administer reserves in an electoral context, at risk of spending existing dollars in the attempt to stabilize the market, without a clear long -term strategy. Finally, the voices agree that the impossibility of accessing reliable financing in the international market Today constitutes a serious stumbling block for the government, which needs fresh dollars to sustain its financing.
Source: Ambito
