After celebrating the triumph of the Argentine team, Sergio Massa will have another reason to celebrate on Thursday. The expectation is that the The IMF approves a disbursement of 5.9 billion US dollars, a change that will allow us to close our 2022 reserve targets, before the currency drought the economy will experience in the summer once the soybean 2 dollar runs out. But the respite will be short-lived: after the holiday break, staff the next review will start in January and you already want to see the roadmap for the first quarter of 2023.
In Washington, three modules from the Ministry of the Economy are being scrutinized. The most important is that of tax data. In the last five months through November, the spending decreased by 18.8% year on year in real terms, according to the Congressional Budget Office (OPC). The curb on public works has given the Treasury a margin of less than 1 point of GDP until the end of the year in order not to exceed the ceiling of 2.5% of the primary deficit. In the Palacio de Hacienda are optimistic, but the Fund he fears a blow from the countryside.
“Being an election year, alarms go off in the fiscal area, it is normal. Historically, nobody lowers the deficit in the elections And this is where their concern begins. We are adjusting, we came well in December and the next review is after, they tell you about 2023,” they explained in an official dispatch, where they confirmed that the next review of the October-December period will start in the next few weeks, in mid-January. therefore, they prepare the projected deficit for the first quarter of 2023.
The technicians want guarantees that the minister will not succumb to the internal pressures of Kirchnerism and the governors. Due to the deterioration of income due to inflation, the government already announced a $24,000 bonus for private workers earning less than $184,000. Spending is known to increase in the second and fourth quarters. This is why attention is focused on the first three months of next year. “They hope you don’t get ahead by spending too much on the election,” an official source said honestly.
Energy tariff subsidies are another closely monitored element. In October, the item grew by 60.7%, well below a 83% year-on-year inflation. The Government must explain to them how it will proceed with the savings on subsidies, after the suspension of the organic review of tariffs extended by decree two weeks ago and the power outages, which have generated crossings with companies. The Fund expects more subsidy removals and additional hikes than expected since March.
The other point at the center of the negotiation is social assistance. The institution foresees a reduction in assistance of 0.7% of GDP in 2023, of 0.2% of pensioners and of 0.1% of transfers to the provinces. This means a pruning of 560,000 million dollars in social programs. Quite a challenge, when the announcement of a $13,500 bonus for Potenciar Trabajo beneficiaries It has already generated cracks: the official UTEP paraded in the city on Friday and the opposition Piquetera Unit will do the same next week.
Close to Massa believe that the IMF “he was engrossedwith the stabilization plan launched in July and warn that it will not be easy to reduce the primary deficit from 2.5 to 1.9%, as envisaged in the 2023 Budget. What for many economists is a “gift” from the Fund, the Il Palacio de Hacienda is seen as a tall order, which will imply a spending cut of 1.3% of GDP. The closest precedent is that of 2019: Nicolás Dujovne reduced the deficit from 2.4 to 1% and Cristina Kirchner returned to can.
On the other hand, the government considers the reserves They are the least controversial point. Soybean incentives would contribute $2.2 billion and multilateral organizations the same to reach the $5 billion floor in 2022. The bet is pull up to dense crop in March. The problem is that if the difficulties in accumulating reserves continue, the demand for pesos will continue to be weak and inflation close to 100% on an annual basis. These indicators are also discussed during trading.
Source: Clarin
