Analysts weigh in on the future of the Argentine economy At times when doubts grow before a rising inflation, scarce Bookings of the central bank, fiscal deficit and a disputed presidential election that will take place in about two months.
political landscape
On Sunday, the Government announced a series of benefits for workers, retirees and beneficiaries of social plans to alleviate the effects that the devaluation of the peso of two weeks ago and the consequent price increase. In recent days the social climate has become rare due to a series of looting of businesses in different parts of the country.
The surprising triumph of javier milei in the primary elections (PASO) to choose candidates caused a shock economic and political that hit the market hard and left the coalition led by Patricia Bullrich and the Minister of Economy and presidential candidateSergio Massa.
economic outlook
finally the International Monetary Fund (IMF) it disbursed 7,500 million dollars after the approval of the fifth and sixth revision of its program for a debt of 44,000 million dollars and approved changes in the proposed objectives.
On the other hand, the country was invited to join the BRICS bloc, along with Egypt, Iran, Ethiopia, Saudi Arabia and the United Arab Emirates, in a move that aims to increase the bloc’s influence. The opposition and some analysts do not welcome Argentina’s entry into the group.
“The devaluation without a plan did not serve to rebuild expectations, but rather had a direct impact on prices and a very temporary drop in the exchange gap,” said Portfolio Personal Inversiones.
“Probably, before launching a plan, putting the economy in a balanced situation requires a series of adjustments and corrections that have a complex social impact“said the economist Martín Rapetti in radio statements.
“Sometimes the size of the correction What you have to do is so big that you are not able to correct enough to stabilize, so you fail because the size of the imbalance It is such that the adjustment you have to make is socially indigestible, then you make an adjustment halfway, it is not enough and you cannot stabilize,” he said.
Inflation and the dollar: what are the markets looking at?
“The financial dollars they remain sustained, and do not loosen even in the face of daily regulations, since the dollarization of economic agents continues in force and could intensify in view of what is expected toacceleration of inflation and the progress towards the elections on October 22 within a context of accentuated uncertainty that only inclines operators even more to caution,” said economist Gustavo Ber.
* “devalue without plan It’s not a good plan,” said analyst Salvador Vitelli.
“The readjustment of the macro continues with the consequences of the post-PASO devaluation and the look at the October elections. The market remains the foreign exchange hedge demand and devaluing in an environment of high uncertainty about the electoral result”, estimated Delphos Investment.
“Consultants that monitor the inflation with a daily and weekly frequency they are noticing a significant acceleration in the rate of growth of prices so far in August,” said Fundación Mediterránea.
“This phenomenon has a lot to do with the devaluation of the day after the PASO and the uncertainty generated by the electoral result, but also with other specific factors, such as the large increase in the price of beef,” he added.
“In an environment of consumption spurred by the high monetary issue and a political context of diminishing central power, the effect has been as expected: a broad and rapid ‘pass-through’ of price devaluations,” said VatNet Financial Research.
Source: Ambito
