If approved, exports could increase by $25 billion over the next decade, according to official estimates. These are five sectors that will be given incentives, lower taxes and regulatory stability: the knowledge economy, hydrocarbons, agribusiness, mining and automotive.
difficult scenario
Argentina will need dollars not only to grow and pay for the necessary inputs for production, but also to accumulate reserves, one of the three agreed goals that, if not met, could cause the agreement to fall. In order to achieve these objectives, the country will need an average of exports of around $91 billion in the period 2022-2024, as analyzed by the CTA Cifra center.
The dollars will be needed to reach the growth of the economy estimated in the program, of at least 3.5% in 2022, 2.5% in 2023 and 2.5% in 2024. For that, the level of exports should be exceeded in 5% in 2022, and then 13% in 2023, and finally 10% in 2024. “This is a difficult goal to achieve, unless the dynamics of exports resemble the strong expansion of the 2003-2008 period”Cifra anticipated in the report.
With this need for dollars, the increase of 25,000 million expected by the program for 2030 should be achieved in half the time: in 2025, for Cifra. It should be noted that it starts from a raised floor: in 2021, exports climbed to almost $78 billion, the highest figure since 2012.
“The level of exports in 2021 was not low. Raising it by US$25,000 million implies an increase of more than 30% in just four years, which is not impossible, but it is difficult,” Pablo Manzanelli, director of Cifra, told Ámbito. In favour, he mentioned the international scenario in export prices. “It will be necessary to see if its effect is lasting”, he anticipated. On the contrary, he added that industrial policy does not have “so far critical mass to consolidate this process.”
For her part, Anahí Rampanini, PhD in Economic Development, explained that to achieve growth of US$25 billion per year in a decade, the rise should be close to 3% per year. “It doesn’t sound compromising in principle, but it would be a mistake to assume that exports will remain at such high amounts,” she assured Ámbito. This is because in 2021 the export price index increased by 25% compared to 2020, while the quantity index increased by 12%. “There is a real increase in quantities, but the biggest increase is due to price. The registered export quantities were stable over time”he highlighted.
Looking to the future of international prices, the Conicet researcher anticipated: “Although it is correct to assume that this year they will remain high due to the war, it is very likely based on economic cycles, if a new catastrophe (climatic, war or pandemic), which should have a downward trend.
Manzanelli mentioned the consequences of not complying with this export jump: “The debt maturity profile resulting from the renegotiation with private parties and the IMF will limit economic growth due to the inability to import.”
overall scenario
In addition, although the debate usually takes place on the local supply of the Argentine parent company, Rampanini assured that global demand should also be considered: “Except for the knowledge economy, the rest of the sectors to be promoted seem to forget the changes in consumption patterns that are being evidenced in the world, and that are changing the legal regulatory framework in environmental matters“, advancement.
As an example, he mentioned the case of Europe, which is about to implement a battery of measures in the coming years that includes satellite control of cultivated areas: “If there used to be a wetland on land where soybeans are grown today, Europe will apply restrictions to us. to said products. Therefore, the export challenge also requires of a correct reading of the changes in world trade patterns, in the face of a world where trade is closed”.
Source: Ambito
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