In the case of the May mission, the only worrying data found in Buenos Aires is inflation. And the result of the local convincing capacity before the IMF envoys, will be the percentage that Washington will impose above the failed 48% that was signed as a commitment a month ago.
The Government is still confident that inflation in April will be significantly lower than in March, and that it would be closer to 5% than 6%. They hope that it will allow Martín Guzmán to show an evolution in the medium-long term closer to the 48% limit agreed with the IMF than the 70% that private analysts (local and international) expect for the year.
The accumulation of more than 16% in the first quarter of the year buried the measurement by projecting an annualized rate closer to 60% per year than the maximum goal negotiated with the international financial organization. However, they believe in the Palacio de Hacienda that March was the worst month of the year, and that going forward (starting in April) substantial improvements in the CPI can be shown. And that the technicians of the Fund will understand that the country experienced the same as the rest of the world at this time of year (increasing inflation that led the United States to report a 1.2% increase for March), aggravated by the Creole problems traditional, already treated with the IMF. Given this, an understanding of the body will be sought, understanding that for the second semester the situation will be somewhat more accommodated. The country’s problem is that the first mission will arrive in the first half of May, when only the data for the first four months are on the table; which, obviously, will be very bad.
Officially, the 50% floor continues to be projected. Or that, in the worst case, a final 10% more should be explained, justified in the evolution of international prices, rather than in local evaluation problems. It is trusted that Washington will accept the breach and the variable can be renegotiated at a percentage more in line with reality. As long as the two main commitments are not altered. The fiscal deficit of 2.5% of GDP as a ceiling and reserves increasing US$5.8 billion this year (with a real update of the exchange rate and a reduction in the gap between legal and illegal dollars), non-negotiable for the IMF. They assume in the Executive that for that first mission with these two goals it will be relatively easy to demonstrate that it is on the right track, with which there is already optimism that, for the second semester and despite the rise in prices, the agreement could continue with life.
Source: Ambito
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