Part of the economic team went to Washington to review the December 2022 objectives with the IMF, which have already been achieved and for which $5.4 billion. So far nothing new. It was reported on Saturday that the government has asked to “modify” its quarterly targets for 2023, while keeping its annual targets, on the grounds that Argentina has been reeling from war between Ukraine and Russia and, more recently, drought. credible.
Because the war in Ukraine is already a year old, and most of the countries are already recovering. And if it was “for the drought”, then they should change the June targets, not the March ones, since it is in the second quarter that exports of soybeans and corn will fall due to the drought.
Beyond the change of macroeconomic objectives with the IMF, the one that is being “pinned” is the Argentine economy. It is precisely the spirit of “Plan Llargar”.
If we get tougher, since Argentina signed the new agreement with the IMF in March 2022, the targets have been “officially” achieved, but in reality, We economists already know that ALL targets have been missed.
The goals of June 2022, with Martín Guzmán as minister, were achieved with the help of a holiday exchange. The September objectives, thanks to the Soybean Plan 1, which made it possible to advance US$ 8,000 million of soybeans, and the December objectives, thanks to the $3.1 billion of soybean dollar 2.
In any case, the March 2023 targets have changed because the Government has decided to move forward $5 billion in 2022; but not because of the drought. And it is better not to delve into the objective of monetary issuance, when there was a ceiling in 2022 620,000 million dollarsbut in reality they almost were $3 trillion, because the BCRA has been redeeming the debt in pesos since last June.
In other words, the government has asked to change the March targets, but because the dollars have been spent. Was he changing goals or asking for a “waiver” (sorry). That said, both with the change of objective and with the derogation, the Government could also receive in June the agreed disbursement of 4 billion dollars.
Of the 3 quarterly targets with the IMF (1. fiscal deficit; 2. failure to issue the BCRA and 3. increase in net international reserves), what appears to be “impossible” today is that of Net Reserves. Today the Net Reserves add up $4.2 billion and the government must come to $7.7 billion in March.
And there is still no news about Dólar Soja 3, from the “famous” Repo of $1 billion nor of further disbursements of organisms.
The fiscal target was complicated: in January it gave a fiscal deficit of $204,000 million and Q1 target is $415,000 million. That is, it must be $209,000 million in February-March; And it’s difficult, because in March it is seasonally higher, due to higher mobility.
In the monetary objective, it is the only one in which it is good; the Treasury is having good roll-over levels (140%) which would allow you not to use the $140,000 millions of monetary issuance allowed until March 2023. Now the Government is trying to reset the April deadlines (from $2 billion). Given that there is captive demand in banks and institutions, they would go along with swaps to postpone maturities to 2024.
lie to someone who is alone
The drought is not a black swan, and it is built into the market (which will enforce more import control under the SIRA system and try to avoid devaluation). The impact of a change in IMF targets is another stain on the Argentine tiger and should not have much of an impact on the market.
The IMF has been very permissive with Argentina and today it seems increasingly clear that the Accord served more to prevent a Kirchnerist government from breaking with the IMF than anything else. Unfortunately, Argentina did not take advantage of the program to order the macro. He was lied to in solitary confinement.
There is still a shortage of dollars to pay the IMF. Beyond the change of target and the fact that Argentina is lying to itself, there is something more relevant and that is that, even if it has achieved the quarterly objectives of 2023, the disbursements that the IMF will make are not yet sufficient to cover the payments that must be made in the coming months. Argentina to make ‘net payments to IMF’ of $3.3bn in 2023, that you will have to get them from somewhere. We imagine that they will be met in other international organizations or countries.
Finally, the March target, which the government asked to change on Saturday, is the last target that will fall under the responsibility of the current Kirchner government. Why the next objective, that of the month of June, will be reviewed only after the STEP, In the month of September. And in Argentina it seems that everything that falls after STEP is already the responsibility of the next government.
Fernando Marull is an economist and director of FMyA.
Source: Clarin
