The elections and the expectation of devaluation triggered consumption

The elections and the expectation of devaluation triggered consumption

The card consumption abroad They shot up in the month of September. With the holidays approaching, the mere possibility of a strong devaluation jump after the elections led to the tourists to advance expenses. Added to this was the fact that there is a tourist dollar which is almost $200 cheaper than the Dolar blue. Can there be modifications? What do you expect from the sector?

According to the report Evolution of the Foreign Exchange Market and Exchange Balance of the Central Bank (BCRA)In September, people bought US$397 million with cards from non-resident suppliers in the country, that is, in tourist expenses or acquiring goods or services from foreign companies. So, Card dollar consumption rose 8.4% in September compared to August and 1.5% compared to the same month of 2022.

In the same line, the collection report indicated that the PAIS Tax applied to the purchase of banknotes and currencies in foreign currency, collected $234,891 million, with a year-on-year variation of 580%. They clarify from AFIP that this tax impacts the measure that established the payment on account for certain operations of import for which demand foreign currency.

Tourist dollar: how companies experienced the September election

Alejandro Festa, Lodging and Tourist Services Manager Take off in dialogue with Ambit He maintained that every time there are presidential elections not only in Argentina, but in the rest of the countries where they operate “there is a change in the consumer behavior associated with tourism as an anticipation of purchase different from a context of no elections.”

“What we are seeing now in Argentina happened before PASO elections (Simultaneous and Mandatory Open Primaries), then the curve went down and it’s happening again now. When you look at the entire year it ends up balancing,” said Festa.

In the same line, Matías Romano, CEO of Catch it Argentina, He stated that in October they had a greater consumption That the last year. “A lot of people bought what they could.”

“The client here pays in pesos and then the agencies or airlines They have to go to the official exchange market (the MULC). The week before the elections was quite desperate, it dropped a little, but it is still at the standards expected in high season,” Romano stated.

Tourist dollar: are changes expected before and after the elections?

Martin Kalos, Director of EPyCA Consultores, He believed that despite the increase in the cost of tourist dollar, a measure that the Government carried out in mid-October, this type of exchange“It’s still cheaper than any other way to spend abroad.”

“For certain purchases that even have to be made in Argentina, it is still the best way to buy abroad either because one travels or because one consumes something that they send him abroad“, he points out. This is how he highlights that nowadays it makes more sense to pay with a card and then transfer the pesos at the card exchange rate, than to use blue dollar or MEP.

For Kalos, the main cause of this distortion is the exchange gap. “The way to correct that is to avoid the segmentation of demand, to go to a single exchange rate in some way, because if you devalue the official one but maintain taxes on that, then you will always have a more expensive dollar card and it relevant happens to be the comparison against the price of the parallel dollars.”

In this sense, he stated that changing this situation depends on a political decision and rules out changes in the short term. “The logical thing at this point would be that hold the situation as it is, until the runoff and depending on who won, the economic policy response will be different. And, in particular, how to get out of the exchange rate and what the decision is at the official dollar level. It is a decision that raises very dichotomous scenarios depending on who wins the presidential elections.

Credit Cards – BCRA.png

Tourism: the expectation for 2023-2024 and the runoff

For Festa, the expectation for this season is optimistic: “We observe that Argentines’ passion for traveling is intact and we hope it will be a great season for both the Emissive and incoming tourism. Regarding destinations, many travelers opt for trips within the country because they have more payment options to purchase products and services, such as interest-free installments. In any case, the tourists traveling abroad They are taking advantage to make their purchases and so freeze prices in pesos.”

In a context of proximity to the runoff, Romano highlighted that as a tourism company, no decision can be made until December 10. “We continue to move forward with our projects, we adapt to the rules of the game.” This is how they live this moment tourism agencies who claim that although they have a good sales volume, it is quite far from the best years in 2014-2015, 2016 and 2017.

Source: Ambito

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