Yesterday was a good day for international markets with the main Wall Street indices rising after Monday’s setback following Jerome Powell’s words according to which the United States would not cut rates, in the meeting of the Committee of Federal Reserve monetary policy next March. Argentine resources retreated and so did Merval.
“There is skepticism”, they confess to the Ministry of Economy, regarding the result that the plan launched by Javier Milei’s government on December 10th and after the double setback suffered in Congress will achieve. First when Luis Caputo withdrew the tax package and then when the Government directly cut the Omnibus Law project. “This skepticism is logical and natural -they commented yesterday afternoon in the corridors of the Treasury Ministry-, “Investors and the market are waiting to see concrete results after so many failed experiences, and we will need to know them first”.
The government has “made” an announcement to them: in January the overall fiscal result will be in balance. This includes paying interest on the debt. In Economy they do the math and assure that it is the first time since 2012 that such a result has been recorded.
The obvious question is: is this outcome sustainable?
January is a month in which there is a decrease in spending execution and therefore the deficit is reduced. It also helps liquefy expenses on salaries and pensions. Not counting the payment of interest on the debt (primary result), in six of the last ten Januarys there has been a surplus.
There are also doubts about the sustainability of the January fiscal balance because provincial treasuries are starting to creak. Yesterday a governor allied with Milei said they hadn’t sent him any money since December. How long does something like this last?
In the last few hours, economists of different minds, from former Economy Minister Nicolás Dujovne to Fernando Morra (former vice president with Martín Guzmán), have agreed on something: Caputo is expected to clarify the 2024 fiscal plan point by point, how it will achieve fiscal balance with the legislative changes and whether the recession will be deeper.
Yesterday on Economy they said that 75% of the effort does not depend on the law and that’s it For this they will partly resort to the fuel tax to compensate. The remaining 25% will be measures under analysis, in addition to liquefaction. For the Eco Go consultancy, 80% of the adjustment will not have to go through Congress, which would give Caputo slightly more margin. The minister also dreams of something else: that the Government will once again send the Earnings, withholdings and moratorium package to Congress.
Source: Clarin
