He economist and director of Anker Latin America Martín Vauthier, describes in dialogue with Ambit that “the economy arrives at the elections with a strong fragility and with very deteriorated reserves in the Central Bank (BCRA), while the quasi-fiscal deficit is very high.” All of this translates into pressures on the exchange rate Very strong.
This week, the Government resumed the crawling peg, the daily micro-appreciations for the official dollar. As mentioned the economist Noelia Abbatethese days we began to see a gradual upward adjustment of this exchange rate, which is consistent with the scheme that was recently announced, and explains that “the intention of this proposal is to provide predictability and make a correction after 3 months of exchange freeze.”
Abbate indicates that it is “a transition scheme until the electoral plane is resolved” and anticipates that it will be “a turning point for this matter.” And, as pointed out Claudio Caprarulo, director of Analytica“on Sunday it is defined who and how will resolve the economic situation and the exchange rate delay: a more shock policy, in the case of Milei, while Massa’s seems to be more gradual”.
Massa or Milei: two positions, the same challenge
However, he assures that “whoever wins, a new stage begins”, marked by the need, among others, for balance the exchange market and resolve imbalances in relative pricestwo elements that “force to modify economic policy”.
“Neither Massa nor Milei will be able to sustain the current model. They’re going to have to modify it. We have to solve the imbalances and go towards a new economic model with a transformation process that allows us to avoid any type of disruptive movement in the economy,” economist Christian Buteler contributes along the same lines.
Thus, for Santiago Manoukian, economist at Ecolatina, The “change or continuity” dilemma is a fallacy, given that, although it recognizes that “The result of Sunday’s runoff will undoubtedly mark a turning point for an economic policy scheme, whoever wins, reality prevails over ideology and the deterioration of the macroeconomy will impose restrictions to which economic policies will have to adapt.”
He considers that this is essential in order to avoid a worsening of the nominal crisis and anticipates that, once the result is known, The current critical macroeconomic situation will require quick signals about the direction it will seek imprint the new administration on its economic policy.
After the runoff, a challenging economy although with points in favor
Thus, Buteler proposes that “The coming economy is going to be very challenging to know how to get out of the current imbalances.” macroeconomic, in a context in which the exchange system is exhausted and the Government’s financing is also in a complex situation.”
Although it is a complex scenario, Buteler anticipates that, “in favor, it must be said that we are going to have a more benign situation” for the following reasons:
- on the one hand, the harvest will be betterbecause this year’s drought was very strong and the weather conditions will be more beneficial,
- Likewise, he anticipates that The Néstor Kirchner Gasduct will allow less gas to be imported and that is going to imply considerably less spending than we have so far on that front.
The economy arrives at the elections with high fragility, marked mainly by a deterioration of the Central Bank’s balance, but Buteler emphasizes that “the two elements mentioned are going to be positive because they will give some air to start a path towards a new model economic, whoever wins.”
milei massa
Vauthier contributes that There is great uncertainty about what the economic program will be after December 10 and assures that “there are many macroeconomic restrictions, so the room for maneuver is very limited, especially in fiscal matters, because inflation limits continued financing with issuance.” Thus, he believes that a program is needed that generates greater demand for pesos and that the BCRA can accumulate Bookings.
All in all, Manoukian believes that the winner’s speech will be relevant. “A more moderate stance, which could be postponing or abandoning dollarization in exchange for legislative support and greater governability in the case of Milei or confirming the national unity government and announcing a market-friendly minister for Massa would send better signals to the financial markets, which could facilitate the transition and begin to improve expectations,” he believes.
Dollar and markets: what to follow between Sunday and Monday
The truth is that, according to the economist Federico Glusteinthe first thing that can be expected after the runoff is that there a reaction of the exchange markets. “Initially, there could be movements in the cypto dollar, which is the price that never sleeps and will react up or down depending on who wins. Obviously, if the Milei dollarization project wins, it will take a leap, while if the other project does, we will see the opposite effect,” he anticipates.
The dynamics that occur in that market will lead to a subsequent subsequent action of the parallels, which are the financial dollars and the blue, which will have a similar reaction. Then you will see the reaction of bonds and stocks by virtue of that result. These variables will impact the inflationary dynamics at the same time, “with an impact on other variables that could lead to a minor or major, but necessary, adjustment,” predicts Glustein.
Source: Ambito
