The Russian invasion of Ukraine hits world markets hard.
“While the government can show that it is trying to meet its commitments (to the IMF) and can justify any shortfall on terms, the IMF is likely to approve revisions to the program and provide quarterly disbursements“, Estimated Credit Suisse.
“The agreement with the Fund comes to worsen the financial variables, I am not going to say improve because it is too big, that the gap decreases a little, that the exchange rate stops falling behind, that the reserves rise a little, that the country risk drop a little, but at the cost of worsening the real variables,” Rodolfo Santangelo of Macroview said in radio statements.
“It is the price that must be paid to have the financial economy a little less disordered than we have it. And, obviously, not only are we not going to continue with the growth of real variables as it was last year because the starting point changes,” he added.
After the agreement with the IMF “the immediate cessation of payments was avoided, but the balance of public finances would require a decrease in expenditures that is difficult to implement politically“, estimated the consultant VatNet Research.
2022 is “a year in which the framework of the agreement with the IMF and international conditions will have significant implications for our international accounts,” estimated the consulting firm Ecolatina.
“This is a very very light and almost unrecognizable deal. I never saw an agreement, not only with Argentina, but with other countries that are in a similar economic situation, which is basically a bridge to 2023 and nothing more. As it is a light agreement, much improvement cannot be expected because the only thing the agreement achieves is to ensure that the economy does not worsen, which is not a minor issue and that is very positive,” said economist Miguel Kiguel.
“The agreement with the IMF does not arouse much enthusiasm or confidence among economic agents, since it is understood that the ¨key¨ continues to be in the political arena,” said Gustavo Ber of Estudio Ber.
He added that “in this sense, the short circuits within the ruling party could be taken advantage of by the opposition towards the 2023 elections, but in the meantime, it generates inconveniences in the management of the government and the implementation of fiscal, monetary and exchange strategies, whose fulfillment of goals is crucial in order to access disbursements”.
“The goals of fiscal deficit, assistance from the central bank to the Treasury and accumulation of reserves, although attainable, are difficult to meet, even prior to the development of the current international context“, estimated Irina Moroni from Fundación Capital.
“The government aims to finance a large part of this year’s deficit through the placement of local debt (2% of GDP), with a growing share of indexed debt, which allowed the placement terms to be extended during March,” said the consulting firm Delphos. Investment.
The industrial production index carried out by the consulting firm Orlando Ferreres & Asociados estimated that industrial production grew 4.5% year-on-year in February, accumulating an advance of 0.9% for the first two months. The seasonally adjusted measurement compared to January registered an expansion of 0.7%, it added.
“The Argentine situation is fragile and it will be a great challenge to reach December meeting the goals (of the IMF) related to inflation, the deficit and the accumulation of reserves because the international context today can be a double-edged sword,” said Florencia Fares. from the University of San Martin.
Source: Ambito
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