With public spending at the center of the debate after the approval of new pension laws, the Government faces political, judicial and external pressure. The YPF case in the US, the review of the agreement with the IMF and the proximity of the legislative elections feed the concerns of investors.
In the middle of a new political front after approval in the Senate of projects that increase pension spending, The market observes the government’s fiscal strategy, the evolution of the YPF case in the United States, and the IMF review, in a context marked by the proximity of the legislative elections.
The Argentine economy travels sensitive days with multiple open fronts. To the challenge of sustaining disinflation and accumulating reservations without altering the official exchange rate, three key condiments were added in recent days: the Senate approval of a series of projects that increase the expenditure, the judicial dispute by YPF in US courts, and the review of the program with the International Monetary Fund (IMF).
He Market reacted cautiously after the approval of five laws in the upper house – among them, the increase to retirees, the restitution of the pension moratorium and the emergency in disability – that, according to GMA Capitalcould increase primary expenditure between 2.2% and 2.5% of GDP by 2026. “The main anchor of the government is questioned: the fiscal balance,” they warned.
In parallel, the government expects an urgent resolution of the New York Court of Appeals after presenting an emergency appeal against the ruling that forces Argentina to deliver your 51% participation in YPF as part of a sentence for US $16,100 million. From Max Capital They pointed out that “the main risk of staying in contempt is the reputational effect and the financing blockade by organizations such as the IMF or the World Bank.”
Meanwhile, the IMF advances in the first review of the new U $ S program20,000 millionkey to defining upcoming disbursements and to sustain the economic roadmap of the ruling party for the October legislative elections.
Market opinions
Analysts agree that the scenario is still conditioned by political and exchange factors. From Vatnet Financial Research They stated that “the government intends to play the limit to reach the next elections with low inflation and without devaluation, betting everything to the fiscal surplus.”
Delphos Investment He pointed out that “the macro foundations justify that the debt cotice near a b-, but the country risk remains dominated by politics: investors hope to see if society supports the chosen course.”
From the monetary plane, SBS group He focused on the recent extinction of Fiscal Liquidity Letters (LEFIS), which is generating Boldist pressure on rates and reconfiguring the money market. Roberto Geretto (ADCAP Grupo Financiero) He said that the loss of rates together with the treasure buying dollars are positive signs for the activity and accumulation of reserves, although he warned about the risk of transfer at prices if the exchange rate is overheats.
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For its part, Invecq He stressed that the current exchange rate scheme allows greater volatility, and that in the second semester the dollar could get closer to the band’s roof. “It is an expected movement for seasonal, political and exchange factors,” he said.
On the external plane, The Mediterranean Foundation warned about the indirect effects of the United States decision of raise tariffs to Brazilian products Since August. The measure, designed to reduce bilateral deficit with Brazil, could “generate an ambivalent commercial deviation for Argentina: export opportunities are opened, but internal competition is also intensified.”
Source: Ambito
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