However, there are two variables to observe from here on that could complicate the picture. On one side, the cost in dollars of the energy balance (which in 2014 reached a deficit of US $ 6,900 million per year) and currently has a deficit of US $ 715 million at the start of 2021 (first 7 months). On the other hand, the lifting of restrictions on international tourism. This last relaxation, post strict quarantine, could imply a “trickle” of other u $ s4,000 million due to the deficit in the tourism balance.
Travel, tourism and dollars abroad
Let’s think that, according to the Foreign Exchange Market Evolution report (BCRA), the deficit for purchases abroad drags an accumulated amount of US $ 1,879 million in the last 12 months. In other words, these are the dollars that are spent abroad minus the dollars that foreigners bring to the country, including tourism and internet purchases. Although this variable had a peak of almost US $ 11,000 million annually in April 2018 (accumulated 12 months), without stocks and without additional taxes, and today we are far from those levels, the lifting of restrictions on international tourism it could skyrocket the deficit again. More than anything, the dollars that foreigners spend in the local market and that will surely not be settled in the official market but in the blue dollar a 180 pesos. In return, Argentines who spend abroad do so with the solidarity dollar. About $ 170 per dollar. And this is a very high dollar, which only by price limits the demand.
With a 2022 scenario without a pandemic and with the opening of borders, this level of tourism deficit could reach pre-pandemic levels, even with a real dollar in the blue today 25% higher than in the months prior to the pandemic ($ 187 current against $ 140 pesos in January 2020, at today’s values). In this state of affairs, the deficit would climb to approximately US $ 4,000 million. Without considering the u $ s2.200 million additional (current foreign exchange deficit).
Energy balance deficit
The other point to visualize is the energetic. The utility rates have already been frozen for 2 years (2019 and 2020) and we had 2021 with an adjustment well below inflation. This is impacting both the fiscal accounts and the external energy balance and that is why a quasi freeze is mentioned or referred to. It is estimated that this year the burden of economic subsidies (to public service companies) would be around 3% of GDP (2.1% of GDP corresponding to energy and the rest transportation). While, the energy balance (in dollars) is again in deficit.
Indeed, if we analyze trends, import payments from sectors such as “Electricity” and “Oil” They have been showing a very pronounced acceleration in recent months. If we take the accumulated in the last 12 months (as of July 2021, according to BCRA data) they reached u $ s 5,067 million.
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For its part, at the peak of the greatest energy deficit, imports reached a record of US $ 14.3 billion. If the flexibility continues and, little by little, the level of pre-pandemic activity rises again, this will lead to a greater energy deficit as a result of the dynamism of the real economy itself. Which implies on the other hand, as with tourism, a greater shortage of dollars with an already very weakened BCRA. In terms of energy deficit, we will most likely close with a figure close to US $ 1,800 / 2,000 million.
In short, 2022 will have two characteristics to consider that will condition the amount of dollars in the market:
- The absence of such convenient international prices that allow decongesting the energy deficit and the fiscal deficit itself. It is worth mentioning that this would condition the BCRA’s ability to become more robust.
- The increase in the tourism deficit due to the relaxation of the measures and the return to normality.
Reason why it is these two “tips” that predict a 2022 scenario with fewer dollars in the market. While considering that we are facing an eventual agreement with the IMF, where, given the conditions commonly required and our macroeconomic reality, a tariff adjustment that allows, simultaneously, to reduce the fiscal deficit and the foreign exchange deficit. Most likely, if such normalization of these variables does not occur, we will have a scenario of greater restrictions on dollars and exchange rate stress.
Professor at the University of CEMA.
Source From: Ambito
