The Monetary Fund relaxed the goals for the second and third quarters that Argentina must respect Tax deficit, Treasury monetary financing and reserve accumulation. They are for the three key objectives of the program that Argentina should achieve to access the dollars (signed for 45,000 million dollars) and to repay the debt to the organization (yesterday, for example, it got the green light for a transfer of 4,010 million dollars).

Of these three objectives, the one that best suited the country’s needs was the fiscal one. By the end of June, Martín Guzmán is expected to show a primary fiscal deficit of $ 566.8 billion and in May it was already at $ 463.448 million. In other words, he had a margin of $ 103,352 million left. Something that he knew would be impossible to achieve because there will be no deficit of this magnitude in June. It will be older. Much more.

Well, yesterday the IMF published that the fiscal target for this quarter and following the gap that has been registered (due to the war, the increase in inflation, etc.), it rises from $ 566.8 billion to a deficit of $ 874.4 billion. In other words, the Fund gave Argentina the green light in the second quarter to increase the expected red for that target by 54%.

Of course, there will be a higher requirement in terms of tax compliance for the second semester. Although the nominal values ​​have been recalibrated (now the expected inflation in the IMF model is 62%), the annual fiscal target in terms of GDP is still 2.5% of GDP (see below). This is anything that is not done in the second quarter will eventually be done in the next half if Argentina tries to avoid asking waiver (sorry) to get the disbursements.

The same happens, for example, with the task of accumulating reserves. Now the Central Bank is tasked with raising about $ 1 billion less in reserves according to the goal agreed in the original staff report. But let’s go back: by the end of the year it should reach 5.8 billion dollars. There is no free lunch.

And what is all this for? To gain some time? Lower the interest rate and thus obtain financing instead of issuing?

In that case, the program with the IMF would not work. One of the organism’s goals is its catalytic role. That is, it is assumed that a program with the Fund generates confidence in the market and this translates into the resumption of the country’s access to finance. Yesterday country risk returned to pre-exchange levels (2,400 basis points) e the IMF warned of the possibility of defaulting.

The program with the IMF has allowed Argentina to avoid defaulting on the organization. Something that would have meant a headache for both of us. But it hasn’t restored market confidence and probably won’t.. Next week there will be a new test when Guzmán faces a race to renew the titles with the market. Many believe it will be a crucial test for the minister.