However, Carro observes differences regarding this dynamic: “Since the end of last year, there has been no strong intervention to control the price of financial exchange rates. In turn, there were new regulations for the payment of imports. Likewise, credit from other international organizations is expected, in addition to the return of SDRs used in payments already made (about US$4.5 billion). However, the accumulation of US$15,000 million in three years with economic growth and closed markets is still a demanding objective. The arrival of foreign direct investment could contribute to reaching the goal. There were announcements of important investments for the next few years”.
For its part, Victor Becker, director of the Center for Studies of the New Economy, He pointed out that the reserve issue is one of the points in which the agreement with the IMF provides greater peace of mind. “In principle, I consider that it is an achievable goal because the agreement announced with the Fund provides for a return of US$5 billion, which is what Argentina paid over the course of last year, with which it will help meet the objective of increase in reserves. In the same way, I consider that the goal is in accordance with the possible evolution of Argentine exports, therefore, I believe that once the agreement is closed, it should not generate major problems for the government”.
Beker remarked that there are four and a half years in which Argentina will pay the Fund with what it receives from the organization itself, and during that time it will possibly receive some funds from the World Bank, the IDB and other multilateral organizations, which will allow financing projects.
In this context, one of the elements that raises questions about how the dynamics of foreign currency inflows and outflows will be is the war in Eastern Europe, which triggered raw material prices. In relation to the context of international volatility unleashed by the war in Ukraine, both analysts pointed out that it adds uncertainty at our local level and that it could alter our trade balance in a certain way.
Carro maintained that it is difficult to anticipate what its impact will be and that, therefore, “the agreement mentions this event as a possible cause for recalibrating goals not only for the current account, but also in the impact of energy subsidies and their relation to the fiscal deficit. Until now, the immediate consequence was the rise in prices of both primary products in which Argentina is a net exporter (such as soybeans, corn, wheat) and in which it is a net importer (such as gas). “Based on last year’s trade balance, these first price impacts are practically offset, but the final result will depend on the evolution over time. What it undoubtedly throws up is uncertainty,” said the UNDAV economist.
cpaparatto@ambito.com.ar
Source: Ambito
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