Clubs that the internal debate is good for the ruling coalition! It is as if it were said that it does children good to see their parents throwing plates at each other’s heads. What a poor prospect!
Rather, it looks like a magazine theater in which the vedettes dispute the placement of their names on the marquee, leaving aside the fact that half of the public went to see another farce in October 2021. Now it is worse, the ordinary citizen is migrating to the theaters that show Frankenstein and Dracula movies.
Citizens express: “if the official leadership does not agree, how is the country going to move forward, and how do you intend to change the situation of the middle class and the popular sectors? “Which is pure common sense.”
Unwittingly, they are reissuing that political bourgeoisie that yelled at him: “let them all go”. While arguing to see who can climb the highest. They look like corporate managers sawing the floor off a minister. It is the people who assume all the risks, because the situation of many leaders is completely different from that of the voters who made them win. It is paradoxical that militant politicians are being functional to “anti-politics.”
A call to sanity
While effective neutrality does not exist, political position should not preclude objective examination. Impossible impartiality and objectivity are not mutually exclusive. – Will they be able to calm down and think? – This is a moment that requires all possible objectivity, which does not exclude the attachment and passion we have for Argentina and our people.
Remember, we have just experienced the greatest looting in Argentine history, at the hands of a small group of tireless cheats, who have not ceased in their destitution attempts since they left expelled by the votes of their victims.
It is true that the Government has not raised an orchard, it does not conform; But the work that was done after the Macrista tragedy, in the midst of the pandemic and right now in the midst of the war, cannot be ignored.
Agreement pour the gallery
The agreement with the IMF is the least austere program in history, despite the disaster that Macri signed, having granted Argentina only an adjustment of 0.5% of GDP in 2022. Don’t worry, the Government has not yet done anything to lower the primary fiscal deficit. For the time being, fiscal policy remains expansionary.
In principle, monetary growth in 2022 will be greater than that of the agreement program, surely resulting in the order of 65%, instead of the 44.7% suggested in the agreement program and the 48% in 2021. The expansion of monetary aggregates in 2022 will grow by above the growth of the base given the increase in the multiplier, which is going to take place due to the drop in banking reserves suggested in the program. This vigorous growth of monetary aggregates is incompatible with the estimate of inflation suggested by the agreement. Do I have to say it…? -What is the part of “let’s see” that was not understood?
If we consummated the figures of the agreement, the placement of net debt in the market would be of the order of 2.4% of GDP. Of that total, about 80% would be debt that is going to be renewed, until one day the decision postponed by Sturzenegger is made in May 2017-when before taking on more than double the debt that they continued to take on, he already had two monetary bases. It’s not better, but it’s the same as when Fernández was left biting her to make a Bonex plan.
Agreement, dollars, activity and employment
The IMF disbursement schedule in 2022 requires the BCRA to buy around US$3 billion in the official foreign exchange market. So far 2022 is not propitious, despite a record liquidation of $7.7 billion, about 20% more than the same period last year. The BCRA did not buy dollars on the official market in the first quarter of 2022. The recovery of net reserves can be complicated, if the Government ends up receiving fewer disbursements from other international organizations, “if they make waves.”
The truth is that the agreement with the IMF brought relief and exchange pax, given the expectation of a relaxation of the repertoire of maturities of the macrista debt inheritance, observing a fall in the price of all unofficial dollars, which were decompressed almost twenty%. In this context, there was an increase in employment of 9.5% and unemployment fell to 6.8% (as Cristina Fernández had left it). The creation of jobs in the informal sector expanded, 12% corresponds to new jobs in the private sector. It improved the reserve position, accumulating US$3.5 billion in 2022, correcting the level of economic activity upwards as well, despite the bump in January. A GDP for the first quarter of 2022 is estimated to be 6% higher than the same quarter of 2021 and 1% higher than the fourth quarter of 2021. In 2022 the GDP grows 4%, with the same inflation that Macri fell (-2.1%). The 2022 trade surplus is estimated to repeat 2021, some US$15 billion in 2022.
Prudence is the mother of science
In short, we conveniently settle with private creditors. With the IMF we have the plan with the fewest conditionalities in Argentine history. Everything was ready to improve the income of the population, but although this purpose remains firm, the economic program now has new conditions: Adverse context for growth and inflation due to strong energy restrictions, increase in commodity prices and an interest rate highest worldwide. But it is not only the international scenario that kicks against it, the worst risks are linked to the deepening of the explicit disagreements of the FDT, which generate uncertainty and a feeling of unpredictability.
If this ferments, there is zero probability of a spiraling of inflation, where the risk of transmuting new price increases is high, and it would be difficult for the Government to maintain the current moderate scheme of micro devaluations. In this scenario, we would be accompanied by a recessive context, which would inevitably lead us to a crisis of unpredictable dimensions. Possibly a “non-economist”, someone “non-political” ignores it, but it is impossible that the FDT is not seeing the monster return. So why push?
The current program does not include structural reforms, nor the insane spending adjustments of the failed macrismo. The scenario is between intermediate and agonizing, since there will be more restrictions, there is social tension today-it can be complicated, said the Secretary of Commerce-Excuse me?
If the program did not convince the market, it must be soberly pious for the people. Today knee arthroscopy allows you to move, but it is not that tomorrow you will play the classic of the classics. Although if the policy plays prepo and does not allow a reversal of expectations, the player is going to break again in a heartbeat.
With more inflation, there would be less activity and more uncertainty, the internal confrontation of the FDT would certainly not resolve, but rather strengthen the deepening of the unworthy socio-economic situation that began in 2015.
If the ascent to ringside from below the canvas is little, know that the next thing may be Hooverian politics. Macri, the disciplined and obsequious destroyer, promised Vargas Llosa. And unfortunately, after another failure of neoliberalism, he would be returning to the neoliberal cycle again, hand in hand with an irrational egotistical national and popular front.
Professor of Postgraduate UBA and Masters in private universities. Master in International Economic Policy, Doctor in Political Science, author of 6 books. @PabloTigani
Source: Ambito
