After Batakis’ visit, on Wall Street they say they want to “see is believe”

During his visit to Washington, Minister Silvina Batakis made an effort to point out that it has the backing of the ruling coalition and vice-president Cristina Kirchner to adopt the economic measures that the International Monetary Fund program provides, including the adjustment of the deficit and the reduction of subsidies. However, it is difficult to break the skepticism of Wall Street, where today they feel it is necessary “seeing is believing”.

Batakis met with the Fund’s CEO Kristalina Georgieva, David Lipton of the Treasury and World Bank officials, as well as investors and directors of companies with interests in Argentina, in the US capital. In the various areas they asked him a lot of the support he had, given those inside the Front of all and above all because inside Kirchnerism they deny the program with the Fund.

He replied to them – and he did so publicly – which he had the support of “the three legs of the coalition”, in reference to Albertism, Christianity and Massism. And that she was “authorized” to comply with the program guidelines with the Fund.

But skepticism remains on Wall Street. Lisa M. Schineller, chief executive officer and principal analyst of Global S&P assessments, said to Clarione during the visit of Batakis that “given the current complex global and local economic and political context, it is important to establish a direct and personal dialogue to deepen the dialogue with all the parties”.

However, the risk expert in Latin America highlighted some difficulties. “The IMF has just revised its global growth prospects downward and macroeconomic conditions in Argentina remain under pressure. Inflation expectations continue to grow and the gap between the official and the parallel remains above 100% ”.

“We hope that both the minister and the Fund officials will address the current challenges and updated economic prospects, as well as the terms of access to official funding.”

Schineller highlighted the commitments made by Batakis and which he said he would honor. “The minister stressed the importance of reducing Argentina’s fiscal deficit, even with the moderation of expenditure for controversial fuel subsidies ”.

“However – warns Schineller in line with most Wall Street experts -, it is not clear how much political support the minister’s fiscal commitment has within the governing coalition ”.

For her, you have to see the facts. “While your signals are important, follow-through and execution are essential. This is the key to reversing the blow to confidence in local markets and securing budget financing in difficult conditions, as well as unlocking access to official funding. “

For Alberto Bernal, Head of the Global Strategy XP titles, Batakis’ visit is “positive because it implies that Argentina has an interest in maintaining a positive dialogue with the IMF. It is a good sign in the relationship between Argentina and the Fund ”.

However, this expert points out that words are not enough. “The market is in an attitude of seeing is believing. The market is unwilling to give Argentina any advantage. If Argentina manages to reduce imbalances and stick to the program, the market will believe it. Wall Street is already skeptical and Alberto Fernández’s government will struggle to regain lost confidence ”.