Since the 8.4% inflation rate was known in April, the economy minister, Sergio Massa He put his economic team in permanent session. The meetings that took place over the weekend concluded with a battery of measures, but, as the Palacio de Hacienda clarifies, they will continue to make resolutions in the coming days.
After knowing the measures this Sunday, the first evaluations of private economists and international analysts show that the most important decisions are the raise the interest rate from 6 points – to 97% – and the increase in the intervention of the Central Bank in the exchange market together with the administration of the rhythm of the crawling peg.
The economic situation presents three emergencies: the lack of foreign currency, the bulky public debt and high inflation. And of these fronts, the most imperative is the one referring to the lack of reserves held by the Central Bank, since, according to specialists, there is a risk that a skyrocketing dollar will lead to an acceleration in prices.
Another announcement is that the agreements with the International Monetary Fund will be accelerated. Although the economic team maintains a fluid dialogue with the technical staff of the organization, there is still no precise date for the completion of the negotiations with the new objectives of the program. The IMF is known to be critical of foreign exchange interventions and moratoria.
In parallel, Sergio Massa confirmed that he will travel to China towards the end of this month to expand the swap in this country as well as obtain guarantees via BRICS to finance imports from Brazil.
Another set of measures refers to sustaining the level of consumption and activity:
- Rate drop Now 12, credit card interest balance rates drop.
- Increase in refunds to vulnerable sectors for debit card consumption.
- New AFIP current debt payment plan of up to 84 installments.
- Tax relief for the moratorium on fees with the Badlar rate.
- Accelerate the approval of imports of capital goods with SIRA to 360 days.
This is a political concern of the government that shows, as one of its main achievements sustain the level of activity and consumption.
However, economists point out that the short-term problem is not one of demand but rather supply, mainly due to the lack of dollars to import.
Specialists also maintain that in the battery of measures no initiatives to cut public spending were known, despite the fact that State accounts are being adjusted. In April, the real expense accrued fell 3% in relation to March and in the interannual comparison the reduction was 11%, according to the Analytica consultancy.
In this sense, the relief resolutions for tax and social security debts are worrisome -surely very necessary for many SMEs- but which imply a loosening of fiscal policy.
The economic leadership also states that price makers are responsible for inflation. In this sense, the advertisements aimed at:
- Set up the Trade Operations Analysis Unit.
- The ordering of price makers and fiscal situation in the Central Market.
- Elimination of tariffs and generation of dumping and protection regulations to improve competitiveness.
These measures, however, according to specialists may encounter difficulties for their application, for example, the Central Market is a tripartite organization (CABA, Nation and Province of Buenos Aires) and that, furthermore, it would not have the attribution to be able to import. On the other hand, although these obstacles were removed, they wonder With what dollars will food be imported through the Central Market?
It does not follow from the announced measures that a relative calm in the exchange market is guaranteed, comment the operators, although it was learned that there were numerous contacts between the economic team and the financial sector.
It should be remembered that Lisandro Cleri He is in charge of the BCRA money table, a man from Massa’s kidney. In the Palacio de Hacienda they also point out that he has improved coordination between the economic team and the head of the entity, Miguel Angel Pescewho participated in the meetings during the weekend.