Sergio Massa has already completed four months as Minister of the Economy and many of the objectives that he himself set for the first hundred days of his administration are still in the pipeline.
In its favor, Massa has currency crisis halted which was generated after the resignation of Martin Guzmán and obtaining through the soybean dollar the enough foreign currency to meet the reserve targets agreed with the IMF.
In addition, it terminated the debt agreement with the Paris Club and granted a bond of $56,000 for one million people with no formal income.
But it is without making many promises which he did the day he took over the Palacio de Hacienda and which are part of the outstanding debts of his management.
Private bonus
In August, the minister said he would convene “business and workers’ organizations” to “ensure a mechanism that allow the recovery of the income of workers in the private sector” who “earn between 50,000 and 150,000 pesos”. After four months the private bonus, which generates disagreements with Cristina Kirchner and the unions, still does not appear while inflation continues to liquefy purchasing power.
Help regional economies
Massa has announced a credit program to increase the number of Argentine companies that export. Then he reinforced it with the promise that there would be a differentiated dollar for regional economies. Although the soy dollar is already in its second edition, the rest of the producers are still waiting. Until now, they only have the promise that there will be a drop in withholdings for regional economies in 2023.
investment fund loan
Upon taking office, Massa said the government was “evaluating four REPO offers to strengthen reserves and buy back sovereign debt” from “three international financial institutions and a sovereign wealth fund”. At the time there was talk of loans for $3.5 billion of funds from Qatar and New York that so far they have come to nothing.
Conversion of social plans into jobs
The minister announced it “a policy of reorganization of social programmes” with a focus on the “return to the labor market”. So far, the only concrete thing has been a check by AFIP on the conditions of the beneficiaries of the plans it has taken over. irregularities in 250,000 cases. Of that total, 20,000 out of a universe of 1.3 million unsubscribes. But there has been no progress in turning plans into employment.
Release of dollars to import
Massa has implemented a new system to give predictability to importers. And he promised companies that signed up to the different versions of Fair Prices that he would free up dollars for them to import inputs.
But with net reserves at their limit, the debt to importers only grows. It already reaches the 9 billion dollars this month, and should extend to $10 billion in January. This affects production and retracts the growth of the economy.
fight inflation
Inflation resolution continues to be management’s big outstanding issue. In August, Massa’s first month in office, the price index was 7%. It fell to 6.2% in September, rose to 6.3% in October and would have settled at 5.5% in November. Massa’s recipe calls for a dose of fiscal orthodoxy, central bank deficit control and issuance, plus price deals, a recipe that the minister was against in principle, but eventually ended up adopting. Now Massa promises that inflation will reach 3% in April, a target that private analysts consider highly unlikely,
The broken promises are joined by the initiatives that Massa has launched but which have not yet started. In this list they are noted variants of the tourism dollar. On the one hand, the Qatari dollar, which establishes a higher exchange rate of 356 dollars, for those who spend more than 300 dollars a month. Although the measure has been implemented, the banks have not yet resolved the crossing of information to know if a person who has cards in different banks has exceeded the limit or not. Also still in limbo is the measure that would allow foreigners to pay the MEP dollar ($229) instead of the official one ($176).
One of the successes of Masa’s administration was to win the support of the same Kirchnerism that had spent the last year and a half bringing down Martín Guzmán. This has allowed it to gain credibility, but analysts now say this effect is fading.
“A characteristic trait of Massa’s management is eclecticism. He does not hesitate to blend orthodox fiscal and monetary elements with discretionary interventions on the markets and spending measures that seek to satisfy specific political, social or sectoral needs”, analyzes Abeceb.
AQ
Source: Clarin
