“Massa’s appointment was seen as positive by the market since it momentarily removes the risks of radicalization and power vacuum when making economic decisions”estimated Roberto Geretto of Fundcorp.
He added that “however, the rise in prices was helped by the performance of emerging assets at a global level and the rise in BCRA rates, where the rebound also occurred from very low levels. Thus, the ‘Massa effect’ came with help, and the welcome from the markets was good, but not as good as it seems.
“The new economic management will have advantages over the previous ones due to fewer internal obstacles and greater agility in management,” said the consulting firm Ecolatina. They added that “it will face the challenges of defusing expectations of an immediate crisis, addressing latent imbalances (scarce reserves, high inflation, fiscal deficit, exchange rate gap) and stabilizing the situation beyond the short term, to which the administration of a delicate economic-political-social balance will be added”.
“Massa became the option within the government because the situation has deteriorated a lot. We have to keep that in mind permanently. The deterioration of the variables has been very rapid, therefore economic policy measures that could work in May may not be enough in August“added Jorge Vasconcelos, from the Mediterranean Foundation.
“The market is very convinced that at some point the government is going to have to devalue. There are 8 billion dollars bought in future dollars. devaluation will take place.
“Massa’s landing comes at a time of political tensions within the government coalition, which had been generating high uncertainty in the development of the domestic economy and in some way conditioning the price of Argentine assets,” estimated Research for Traders. “The market sees the president of the Chamber of Deputies as someone friendlier, and it is estimated that Massa’s arrival in the economic portfolio will bring about changes aimed at normalizing the country’s imbalances, generated by high inflation and the growing fiscal deficit” , he added.
“From our perspective it is hard to believe that he is going to be the person to restore confidence to the markets”sentenced the StoneX brokerage.
“One of the biggest concerns is that the agro-export sector liquidates more, so the BCRA can obtain the dollars it needs. One of the proposals that has been circulating is a higher exchange rate for agriculture,” said economist Natalia Motyl.
“As long as the stocks are maintained, so will the disincentive to sell dollars. This negatively affects the amount of exports going forward.”, concluded Aldo Abram, from the Fundación Libertad y Progreso.
Source: Ambito
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