According to the academic study, during the first ten months of the year a primary deficit of $ 776,645 million (1.8% of GDP) and a financial deficit of $ 1,337,799 million (3.1% of GDP), after excluding extraordinary income corresponding to SDR.
In this framework, the work highlighted that “It is difficult to know the scope of the measures that will end up being negotiated, if they will be implemented successfully and if they will be fulfilled in the medium term” and that “The agreement to be negotiated (with the IMF) is not yet known, but it will surely be an Extended Facilities program that extends maturities for ten years, thus alleviating short-term obligations and decompressing the financial front.”
The level of real exchange rate (RER) average in the first week of December registers a depreciation compared to November 2021 of 2,3% (December 2010 = 1). At the same, the real exchange rate (TCR) is a killer 18% below the historical average January 1959 December 2021, that is to say, in historical average, the current level also registers a real appreciation.
The IAE indicated that the gross international reserves of the Central Bank present a balance of u $ s41,530 million at the end of November, which represents a loss of u $ s1,287 million which constitutes the largest of the year.
Juan Jose Llach, emeritus professor at IAE Business School, analyzes the international economic context, strongly affected by the health crisis: “If inflation in the US persists at values similar to 0.6%, the Federal Reserve will be forced to accelerate tapering (lower purchases of Treasury bonds, equal to lower monetary issue), and also to anticipate rate hikes at the next Fed meeting (December 14 and 15) ”.
What’s more, Llach remarks that an important global debt, public and private, is lurking that exceeds, for the first time, 350% of world GDP.
With the magnifying glass placed on Argentina, the estimates of the Gross Domestic Product (GDP) for the third and fourth quarters of 2021 would be of 3.9% and 1.2%, respectively. Certainly, they are a better performance than previous estimates.
Eduardo Fracchia, Director of the IAE’s Economy Area, considered that the Argentine economy “is not in a terminal crisis, but is spinning around without being able to get out, in a roundabout of stagnation since 2012”. “Argentina must reach 2023, the key is to avoid a crisis that pushes 10 points more poverty, which is already at 45%. In this, it is essential that the president reinvent himself, who until today is without a clear strategy ”, he claimed.
Fracchia estimated that inflation in 2022 could reach 75% and climb even higher if the inevitable devaluation in the next semester gets out of control. Meanwhile, formal employment will not grow if there is no labor reform and sustained growth, the IAE warned. “Poverty can give way with growth of 4% and inflation close to 10%. A challenging schedule and a difficult environment for companies to put on their helmets ”He said about the measures underway.
The latest unemployment rate in force from INDEC for the second quarter 2021 of 9.6% at the national level improves by 163,000 workers vs. the previous one for the same period 2020 of 13.1%. However, the number of employed job seekers worsened from 11.6% to 17.0% in the same period and underemployment from 9.6% to 12.4%.
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Agustin Usandizaga, President of the Business Chamber of Tandil and Suma Inversiones, stressed the need for an agreement with the IMF. “After an agreement, Argentina will be in time to implement a credible, consistent program and generate the necessary conditions to open the possibility of returning to the credit markets in the coming years”, he expressed.
For Usandizaga, “achieving a 10% reduction in yields will take a time to consistently generate credibility and some reforms, and return to market rates of 7% as Bolivia currently pays and our country achieved a few years ago, it will surely have to bring about changes more structural to recover lost growth ”.
Source From: Ambito
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