Guzmán in Washington
The Minister of Economy will begin an intense agenda where he will meet with Kristalina Georgieva and attend the Annual Assembly of the Agency and the World Bank. Between Monday and Tuesday, Guzmán is expected to meet with the Fund’s staff counterpart, the head of the team that negotiates with the country, Julie Kozack, and the body’s permanent envoy in Argentina, the Venezuelan Luis Cubbedu.
On Wednesday the 13th, the fourth summit of finance ministers and central bank presidents of the G20 under the Italian presidency will also take place in Washington, which will discuss issues of interest to Argentina, before the Fund’s annual Assembly. The G20 ministers will also assess how to continue supporting vulnerable countries affected by the Covid-19 pandemic.
Sustainable Mobility Law
The Minister of Productive Development, Matías Kulfas, will present the sustainable mobility bill. This initiative foresees investments in different industrial sectors for US $ 900 million and contemplates, among other actions, a wide renovation of the public transport fleet in more environmentally friendly conditions.
The project includes “tax benefits and incentives for those who buy electric cars and will surely have a strong impact on the renewal of the public transport fleet,” the Ministry of Productive Development told Télam. “Although in the electric cars chapter the renewal of the current vehicle fleet will not be immediate, we are optimistic in the case of public transport, which will benefit the environment for large cities,” official sources remarked.
The National Institute of Statistics and Censuses (INDEC) will reveal next Thursday the variation of the Consumer Price Index (CPI) for September, which it is anticipated around 2.9% on average as anticipated by private consultants.
The last survey of the state agency, corresponding to August, showed an inflation of 2.5%, which meant the lowest record since September 2020. The accumulated of this year was located at 32.3 percent and the year-on-year climbed to 51 ,4%. In this way, a new acceleration in retail prices would be evident, after remaining in constant decline from the peak of 4.8 percent reached in March.
The Minister of Economy, Martín Guzmán, acknowledged the change in the decreasing registers anticipated by the consulting firms and which will be ratified this week in the INDEC report. “The trend is not linear, we expected a month where the month-on-month inflation rate would increase,” Guzmán said during the Annual Convention of the Argentine Chamber of Construction held last week.
The Market Expectations Survey (REM), prepared monthly by the Central Bank from the contribution of banks and private consulting firms, I consider that the expected inflation for September is 2.7 percent and that 2021 would close with an increase in retail prices of 48.4 percent.
While the average that emerges from the data of different consulting firms shows an inflation of 2.9 percent, with a minimum of 2.5% and a maximum of 3.3%, according to Equilibra.
The 29 percent annual inflation forecast in the 2021 Budget has been far from the current indexes that already place it at 32.3% for August, in the absence of accounting for September and the last three months of the year.
Debut de las LELITES
The Finance Secretary announced last week that it will begin offering a new financing instrument exclusively oriented to the Common Investment Funds (FCI): Liquidity Bills from the National Treasury, also known as LELITES.
The instrument is the result of joint work with the National Securities Commission (CNV) and the Argentine Chamber of Common Investment Funds (CAFCI). As officially reported, this “generates incentives for more investors to turn to the Treasury by increasing financing in pesos and strengthening the public debt market in pesos.”
The first tender will start on Thursday, October 14, with an issuance period of 21 days with expiration on November 8. The second is scheduled for Wednesday, October 27, within 25 days.
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