There are no dollars arriving in the bottomless barrel of the Argentine economy. In 2022, exports set an all-time high with $88.446 million. Even so, the government of Alberto Fernández has given a few more turns to the foreign exchange tourniquet, added taxes to the tourist dollar and trampled on imports, even at the risk of cooling the economy.
Why are the dollars not enough even with record exports? Invecq economist Juan Pablo Albornoz explains that “we need to look not only at exports, but first of all at the trade balance (exports minus imports) and then at the rest of the uses and sources of foreign currency: the payment of interest on debt, for example, among other games”. In this case, 2022 closed with a trade balance of US$6,923 million53% less than in 2021.
Javier Casabal, fixed income strategist at Adcap Grupo Financiero, adds that although the level of exports was 13.5% higher in 2022 than in 2021, imports increased even more: 29%.
Despite the obstacles imposed by the government, imports grew last year driven by energy. “Of the 18,300 million dollars that increased imports, 7,000 million dollars are due to the increase in fuel purchases,” Casabal points out.
From Ecolatina Santiago Manoukian adds to the list of factors that have played in favor of the outflow of dollars in 2022 “the higher logistics costs and the growing tourism deficit”.
Part of the problem is this exports are virtually the only source of foreign exchange the country has today. The international markets have been closed to Argentina since 2018 and only the agreement with the IMF has allowed the entry of foreign currency to refinance the debt and cover the failed attempt to avoid the jump in the exchange rate during the Mauricio Macri administration.
With currencies scarce and a need for dollars to pay debts, imports, savings and tourism, The recipe of the Frente de Todos was to intensify the exchange rate.
“Exchange restrictions serve to contain the increase in imports. But at the same time, the exchange rate has fallen against the dollar during 2021, which implied a large incentive to increase imports
Source: Clarin
