Although it is true that next year is elective, it will be very different from what we are used to. The increase in the supply of mortgage credit, the improvement in real wages and the recovery of the level of activity will not be provided by a fiscal expansion package.
Economic growth and lower taxes bring about the income recompositionboth for individuals and companies. The elimination of the COUNTRY Tax and the potential reduction of withholdings go in this direction. The projections of the main consulting firms indicate a recovery around 4% of GDP for next year, and an inflation of 28%.
The imminent lifting of the stocks, according to what was expressed by the Government itself, “it will be lifted in the first quarter of 2025”, how the market conditions generate a favorable environment. The credibility of the economic plan, the exchange rate gap at 13.48% (ccl vs wholesale), inflation traveling to 2.5%, interest rate converging downwards, economic activity in clear recovery (6 consecutive months on the rise, and If we take, end to end, since the beginning of the mandate it has grown by 3%), the registered salary of the private sector with 7 months of increase, and all this in a context of consolidated fiscal adjustment with a primary fiscal surplus of 2.1% of GDP, and financial of 0.6% of GDP.
Dollar: what is missing to lift the stocks?
Despite the purchases of the BCRA in 2024 for US$19,480 million, and with the losses of the “blend” dollar for US$4,870 million, net reserves remain negative at US$2,200 million. The The current account that is talked about so much today accumulates a positive balance of US$5,217 million in the three quarters of 2024.
The problem is that the tourism account is generating a drain of US$700 million per monthand today we do not see losses of reserves as a result of the dollars that entered due to money laundering, that is, the financial account. The tightening of inflation projections for 2025 in the United States generated a reduction in expectations of lower rates going forward that hit the region’s currencies.
The Brazilian real has depreciated 30% against the dollar so far in 2024. On the other hand, the peso adjusted for inflation versus the increase in the exchange rate shows an appreciation of 97%.
The Government is no stranger to this problem, although it seeks to maintain a reduced exchange rate gap and even plans to lower the “crawling peg” to 1% monthly.
In Brazil, the monetary authority intervened in these last rounds with US$8 billion to calm the rise of the dollar, while the BCRA did so with US$300 million. According to a study carried out by Roberto Cavallo, where baskets of goods and services from both countries were analyzed, the Argentina is 20% more expensive in hard currency.
forward, We will see a higher level of exchange rate but, at the same time, lower productive costs as a result of tax reductions, although the companies’ margins will be lower. They will have to adjust for sales volume and professionalize their financial structures. Some examples are: reduce tax costs by crediting checks in ALYCs (Settlement and Clearing Agents) to avoid paying tax deb/cred, and do the same with payments to suppliers, that is, issuing checks also via ALYCS.
The taking of idle credit through working capital lines can be reinvested in the market, generating rate arbitrage that allows extraordinary profits on the company’s available financing. A much more reasonable exchange rate for our productive matrix ranges between $1,400 – $1,500, so dollarize portfolios via Bopreales It can be a very good option.
A key fact is that for the photo of personal assets, individuals tend to bring their possessions abroad to Argentina, which generates that The cost of exchanging the MEP to the CCL goes to zero at this time of year. For those who do not import goods and/or services, a window of opportunity opens to externalize financial assets.
Lastly, I emphasize the importance of place excess flows in pesos in financial assets, that are plausible to place as collateral so that, in case of need for pesos, take security instead of liquidating that asset and generating an extraordinary profit, as a result of allocating the flow at a rate higher than the debt contracted, instead of using directly from that flow to the company’s usual business.
Co-Founder of Bull Road Investments
Source: Ambito
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