Massa advances in the elaboration of a stabilization plan

“The stabilization plan will be announced after the budget is approved and with the macro ordered,” pointed to Ambit the high official source. It should be noted that a stabilization plan pursues a series of objectives with the purpose of correcting certain imbalances, to achieve economic stability as the Austral Plan or Convertibility attempted, to cite a few examples.

A fact that is not minor is that the vice minister Cristina Fernandez is permanently informed of the important decisions made by the new head of the Palacio de Hacienda and that, according to sources close to him, Massa has your support.

The recomposition of reserves held by the Central Bank promoted by the “soybean dollar” – already liquidated for a value of US $ 6,000 million– which is estimated to reach more than 7,000 million, will continue in October with some 3,900 million that would contribute multilateral organizations and an international credit, as advance Scope. These funds will be complemented by the disbursement of almost 4,000 million dollars by the IMF once the board approves the second review.

Another factor that is taken into account by the economic team is the good dialogue that Argentine officials maintain with the IMF. tend to ensure the continuity of the financial support of the organization, as indicated in the financial market.

With the approval of the IMF, the refinancing of the public debt in pesos and the recomposition of reserves, the internal evaluation of the economic leadership is that “We are managing to contain the most urgent fronts”, according to sources from the Palacio de Hacienda. However, they clarify, these are the first steps on a path in which “more measures will be taken to face the serious economic difficulties”.

Climbing

The economic team is particularly concerned about the progress of inflation – after the 7% that the index showed in August, private consultants project an equally important variation for the current month. Precisely, the economic leadership is working with the idea of ​​announcing stabilization measures by the end of next month.

“There is no history of countries that have been able to grow with a gap of more than 100% between the official dollar and the parallel dollar and with inflation of more than 60%”, specialists say.

In economic management circles they recognize that the problem of inflation demands a response from the authorities and, in this sense, they anticipate that they are working on different policies aimed at defining a stabilization program that coordinates the different variables, that is, fiscal, monetary and exchange rates.

Likewise, they consider that companies have margins to collaborate in a process of deceleration of prices, since the figures show that in recent years have been steadily increasing profit margins (with the sole exception of 2020, due to the pandemic).

Containment

Adjusting the Treasury accounts was one of the mass team prioritiesa. As the data to August released this Wednesday showed, Revenues from the national public sector have been growing at a rate of 73.7% year-on-year. propped up mainly by social security resources and those linked to economic activity.

Meanwhile, the spending presented a rise of 72.9% compared to August 2021, a variation that represents a fall of 3.1% in real terms. For the second consecutive month, expenditures rise less than inflationa trend that should continue and deepen to reach the year-end goal included in the agreement with the IMF.

In the first eight months of the year the primary deficit was around 1,100 billion pesos, equivalent to 1.4% of GDP. Given that by September the goal with the IMF is that the primary imbalance does not exceed 1,142 billion, the increase in the red for September should be around 42,000 million.

Despite the limited margin, in economic driving it is ensured that the goal will be met. It should be noted, in this regard, that export duty collection will be increased, by nearly $200.0000 million, due to the strong increase in grain exports that triggered the soybean dollar. Likewise, the acceleration of inflation will contribute to the liquefaction of spending.

Approval

With these numbers, which have already been advanced to the IMF’s technical staff, it is expected that in the next few days the agency’s board will approve the second revision of the Argentine program and, consequently, authorize a disbursement of close to 4,000 million dollars.

After Minister Sergio Massa’s tour of the United States, specialists in Washington maintain that “the change in the relationship between the IMF and Argentina was manifest” Y “not because the Fund has changed, but because a different attitude is observed on the part of the Argentine authorities”.

The change of style is also commented “(Kristalina) Giorgieva’s repeated praise of Massa’s team came as a counterpoint to the ‘lone wolf’ attitude that characterized the Guzmán administration.” They remember that the former minister concentrated the negotiations only accompanied by the Argentine representative before the IMF, Sergio Chodos.

In Washington they also point out thatis not less than Gita Gopinath, first Deputy Managing Director of the Fund and an economist of great influence in the organization, participated in the talks and agreed with the positions of the Argentine delegation.

The improvement in the relationship will allow the Fund to continue taking a “flexible” attitude in relation to the Argentine program. Despite the good response from the field, specialists point out that Argentina will hardly be able to meet the goal of 6,800 million dollars of accumulated reserves planned for the current year. Possibly, they estimate, the year will end a little more than 1,000 million dollars down, but it is believed that the diversion will be acceptedparticularly taking into account higher expenses for fuel imports due to the rise in prices derived from the war in Ukraine.