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Legislative Elections: Between Micro Pocket Humor and Macro Imbalances

Another important weekend for consumption is coming: Mother’s Day, which is the second most important commercial date of the year. The government here does expect that the actions of incorporating bonds, reinforcing social plans, raising the living and mobile minimum wage and consumer financing plans will show a good result in the performance of retail sales. It will be the barometer of Pocket Social Humor.

According to a Demand Projection report prepared by Focus Market, the items with the greatest predisposition to make gifts are Clothing with a choice for 22% of Argentines, Footwear 11%, Perfumery 8%, Appliances 10%, Experiences 10 % (dinner, hotel, spa, etc.), Flowers and Plants 9%, Bazaar and Gifts 8%, Telephony 8% and IT 6%. Among the most chosen places of purchase according to FECOBA (Federation of Commerce of the City of Buenos Aires) are Open Sky Shopping Centers (traditional retail trade) for 36% of cases, Shopping 22%, Supermarkets 6% , Electronic Commerce 27% and Outlet 8%. In the case of Electronic Commerce, it is shown as a great winner with a distribution in the purchase orders of 37% of the cases purchases through the seller’s direct website, Market Place (such as Mercado Libre) 42%, Facebook 6%, Instagram 12% and Others 3%. The projected average expense for this date would be $ 2,560.

Recall that in September, although retail sales grew 15.7% year-on-year, they fell 0.5% compared to August according to CAME. Consumption growth projection for the last quarter of the year would be 3.8%. The government will have to evaluate not only if it is enough to win the elections but also if after the same the accumulated macroeconomic imbalances will not be a real problem for the management itself.

With a very high inflation floor at an average of 2.8% for the last four months of 2021, the monetary issue to which the government is resorting to finance the expansion of public spending and an increase in the fiscal deficit has shown that by resorting to this way in 2020 it is leaving a year-on-year inflation of 50%. This projects that in 2022 what was done today will impact the future price level. According to the Ieral, in the fourth quarter of 2021, the issuance of fiscal and quasi-fiscal origin could reach the equivalent of 12.6% of the estimated GDP for the October-December period. As a reference, in 2020, when the issuance resource was used and abused, the pesos transferred to the Treasury plus the Leliq interests reached the equivalent of 9.6% of GDP.

International reserves have fallen from $ 8 billion in June to $ 4,800 today. According to the Mediterranean Foundation, if the goals of the 2022 Budget could be met, then we would have that in three years (from 2019 to 2022) the primary expenditure in pesos would have multiplied by 3.25, but the price of the official dollar would only have been made for 2.33 (from 50.02 to 116.5 pesos). If the expected trajectory for primary spending replicates, by mid-2022 the dollar should be around 162 pesos, 39.5% above the budgeted value.

To this great macroeconomic problem that will remain as an inheritance in the attempt to reverse the result in the PASO on November 14, the debt problem with the IMF is added. While Martin Guzman Your interlocutor has devoted more time in his management to the issue of the debt with the Fund than to the economic plan itself with verifiable fiscal and monetary goals. Kistalina Georgieva IMF Director is in a very uncomfortable place to hold her position accused of manipulating data in favor of China when she held a senior position at the World Bank. The other epistolary interlocutor of Martin Guzman it is Cristina Fernández de Kirchner that by letter reviews the Treasury numbers and implements higher Public Expenditure and Fiscal Deficit while Maximum Kirchner he refers in public events to the dollars that are destined to the debt, to the failure of the IMF in our country and to the falling in love with the Minister of Economy for the macro numbers that do not solve the quality of life of the people.

Macro numbers present red-hot, fiscal and monetary imbalance, foreign debt front still under negotiation and domestic policy front in permanent tension without agreement and cohesion in the Frente de Todos coalition. Without cohesion neither political nor technical.

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