In parallel with the meetings that the IMF staff held this week with Sergio Massa’s team in Washington, agency officials asked local analysts what were the implications for the economy of some data released in these hours, such as the approval of the Pension Moratorium, the decline in funding and the multiplicity of alternative exchange rates, such as the Malbec dollar. It is a fact that the economists of the IMF, led by Luis Cubeddu, do not stick to the version that the economic team has brought there and consult the events with third parties. Hence the delay in making the objectives of the expanded facilities program more flexible.
Washington’s economic team advanced, among one reason, that Argentina would not be able to meet its goal this first quarter due to drought. In the IMF they know that this is not the case because the lack of water is not manifested in the exports of soybeans and corn -which start from April-, but in those of wheat and these are only 15% as noted by the IERAL this week.
Even the IMF knows that dollars are scarce, not because of the situation in the countryside, but because its liquidation (soy dollar 2) was brought forward to December, to close the objectives for the fourth quarter of 2022.
Another argument by the Ministry of Economy in favor of greater flexibility of targets is that the war in Ukraine has cost the country about 5,000 million dollars in fuel imports. The IMF will respond that some of that cost could have been saved by raising tariffs, which was not done as promised by the government.
In the IMF’s view, if dollars are lacking, their price must rise. And that’s what he believes hasn’t happened in recent years, in which the peso has been allowed to appreciate and has overheated the economy by consuming foreign currency instead of hoarding it to repay the debt. The official dollar’s rise today aims to reverse this behavior. The evidence is that the current account surplus of the balance of payments went from a surplus of 1.4% of GDP in 2021 to a red of 0.8% in 2022 and in 2023 it would be less than 1% according to the international economist, Jorge Vasconcelos.
“For this year, the fact that the IMF agrees to loosen reserve targets does not contribute much to expectations -Vasconcelos himself underlines-, the numbers of the external sector are so tight, that even when the reserve accumulation target is testimonial only In any case, there will not be enough currency to finance imports at the level of those recorded in 2022. The lack of inputs has already begun to affect the functioning of production activities and there is no way to prevent this phenomenon from dominating the scenario of 2023.”
Of course, adds Vasconcelos, the IMF is there: this year Argentina will pay the IMF more dollars for capital and interest than it will receive. In total it will be a negative amount of US$3,155 million.
In 2024, for the next government it would be something similar (-3,095 million dollars). Maybe that’s why Horacio Larreta’s economists already met the IMF in Washington a few days ago.
Source: Clarin
