“It is probable that the government will have to recalibrate the goals of net reserves due to the drop in agricultural exports, which would help to prevent the slowdown in activity from becoming more accentuated,” said consultancy Delphos Investment. She estimated that “in this scenario, the inheritance for the new government would be more complex than that foreseen in the agreement with the IMF.”
“If confirmed, the reduction in the goal of accumulation of reserves with the IMF implies recognizing what was already known: the drought and the early settlement for the soybean dollar made it very difficult to reach the current target. Apart from saving a waiver, a lower goal would also imply less adjustment of the stocks to reach the new number,” estimated Fundcorp’s Roberto Geretto.
“We are in a process of stagflation and we are at the mercy of good luck and the good will of the international financial community,” said VatNet Financial Research.
“The IMF has overlooked the latent danger of the game of political balances on an international scale, in a very different role from the one it had in past decades”he pointed.
“Both the Government and the IMF have to understand that, if they want to collect, they will have to give the possibilities to those who have the feasibility of producing and de-affected them for tax purposes, generating conjunctural and structural conditions,” Carlos Achetoni, president, said in radio statements. of the Argentine Agrarian Federation.
The goals with the IMF
“Beyond the very short term, the Government is focused on getting bridges to reach the end of the year. For this, it is advancing in an agreement with the banks to kick the maturities in pesos in the coming months (6.2 trillion pesos until next July) and seeks to relax the international reserves goal for March with the IMF,” said the EcoGo Consultant.
“The fiscal goal based on the IMF requires a primary result with a fiscal deficit of 1.9% of GDP. This leaves a very limited remaining fiscal margin (1.77% of GDP) for the remainder of the year. The nature election of 2023 conspires against the fulfillment of said goal, but paradoxically, not deviating from said path could represent a positive element in terms of expectations that could help a potential electoral performance of the ruling party and the economy minister in particular”, estimated the MCA consultant.
“With a ‘crawling-peg’ one notch above and closer to 6%, this could act as a prelude to a resumption of rate hikes by the BCRA in the event of the recent acceleration in inflation extendingsince there is no room left to accumulate further loss of competitiveness within a scenario of currency drain and challenging reserve goals with the IMF,” said economist Gustavo Ber.
“The baseline soybean scenario assumes a production of 34.5 million tons in the 2022/23 cycle, imports of 6.0 million tons, milling of 36.0 million, exports of soybean grain for 1.5 million and final stocks around 2.0 million tons,” said Fundación Mediterránea.
He estimated that “In this base scenario, total exports of main agricultural products and industrial derivatives would be approaching 37.8 billion dollars in 2023, with a drop of 8.4 billion compared to the previous year (-18%).”
Source: Ambito
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