The disastrous legacy that the government leaves the government

It appears the government has finally warned that the economic crisis is proceeding at a rate that some explosion risks already recommend quick and effective actions. It is understood: much more powerful and serious remedies than patches of the type dollar soybeans, which will last just a month and will add little or nothing to export accounts and producers’ pockets.

It is also understandable: the need for the Fernández, Kirchner, Massa leadership to begin strike early with measures that can slow down the speed of the train and, subsequently, improve bad weather and the negative or directly negative expectations that lurk in every part of the country. If everything came with a plan articulated on several fronts as there was not, it would be an encouraging development.

One of those lights that begin to turn from yellow to red appears, in fact, more and more reduced stock of Central Bank reserves, which is to say less firepower or more exposure to sudden jumps in the foreign exchange market. And also, fewer resources to support, above all, the essential ones, expensive energy imports.

Private data reveals that market interventions (sales) caused BCRA a loss close to $ 1,300 million in July. And that so far in 2022 the balance between purchases and sales has left him as much as 600 million dollars against the 7.3 billion dollars he had accumulated last year.

The blind side of this landscape is that the Central suffers from a lack of foreign currency despite the high trade surplus that INDEC statistics sing, supported, in turn, by the unprecedented mountain of vegetables that the oilseed-grain complex has cleared. Moreover, it suffers when there are so many obstacles, controls and various traps that should contain imports.

Foreign purchases are rising from record to record, although the economy does not accompany or explain such a phenomenon. It’s a suspicious move where it is highly appreciated to earn dollars at the official price and therefore capitalize on a gap with parallels that remains in the 130-140% zone, that is, it yields 130-140%.

Well of this world, the opportunity advises to move fast.

Another measure of the problem, which is also a preview of what’s to come, is how much it costs to cover imports of gas, liquefied gas and fuels, namely effects of the energy crisis which took office during the second presidency of Cristina Kirchner and resists with a notoriously insufficient internal production.

These transactions totaled $ 6,609 million in the first half of the year, 190% more than in the same period of the previous year. And private screenings that bring the bill to nearly $ 8,000 million for July-December. It sounds like a lot, even if the final number isn’t exactly that, it’s still going to be big.

The government is betting that soybean producers will accelerate the sales they hold back in order to equalize the scores. They are based on calculations by industry specialists, for which at the end of June only the 27% of the harvest, the lowest volume of the last 15 campaigns. Obvious: the output is somewhere else or it’s slow.

The truth, in principle if not ultimately, is that the Central Bank is scraping the bottom of the pan. That is called net reserves, let’s say available, which would barely reach $ 2,600 million, low compared to energy bills and another example of the risks and urgencies that lie behind scarce dollars.

A digression, on the exposed crisis and on the labyrinth that the inexperience of the current version of Kirchnerism has been able to arm itself against, says that the Christian theorem that everything has to do with everything is not always a great explanation of the problems. It is not, at least linearly.

It happens that within the whole there are parts that weigh more than others and define the result, as is also demonstrated by the speed with which they intensify, the whistle, the inflation and its destabilizing tail blows.

Inserted in the monthly records, the INDEC indices which went from 3.8% in December 2021 jumped to 4.7% in February 2022; at 6.7% in March and after attending the 5th and peak May-June, they paint to go up again by 6% in July.

With prices for modified dairy, baked goods, and fruit and vegetables, some consultants estimate 6.3 to 6.8 percent for the month. Thus, the January-July cumulative would be around 45% and would be 16 percentage points higher than the 29.1% recorded in the same period of 2021.

The numbers salad continues with others just as heavy. To begin with, inflation would close the year close to 90%, or about 40 points above 50.9% in 2021 and almost 60 points higher than the 2020 record. Already right, the increase accumulated so far by the government is 176%.

It’s clear that wages go head to tail against prices, and forgiveness for landslide. The presumably victorious joint ventures, which this year closed at 60%, are also flying, including that of La Bancaria praised by Cristina Kirchner: they go straight to defeat.

Changes in Kirchner’s erratic and unpredictable management model, the Central Bank has just hit interest rates, aiming for them to exceed inflation, as agreed with the Monetary Fund.

The performance of the Leliq with which it intends to regulate the market has increased from 52 to 60% nominal per year, which is equivalent to paying an effective 79.8% per year. For fixed terms of 30 days, it imposed a floor of 61%, equivalent to 81.3% of annual liquidity.

In line with the urgency of withholding pesos, preventing them from putting pressure on parallel dollars or having the state run out of funding, the government offers government bonds at a nominal annual rate of 70%, which represents an effective annual rate of 90%. . .

This is how a mess is being prepared which will cost to disarm or which will require disarming a very delicate, if not upsetting, market operation. There are, for example, the 3.5 trillion pesos of the National Treasury debt that expires in the second half and the staggering 5.8 trillion that add up to those Leliqs for which the Central Bank pays 60% per annum in 30 days. . .

Already with a more precise and detailed panorama, you will soon know As much as he wants, he can or they let him get to Sergio Massa in a key point that will put his plans into play and will measure the real weight of the word super-minister. AndIt is about the fiscal adjustment, of Cristina Kirchner and of the so-called present and useful state K.

The latest report from the Congressional Budget Office says so In the first half of the year, public spending grew by 9.6% in real terms, that is, discounting the inflation which in that period was 60%. A powerful number on its own and more powerful, if you will, than the actual 0.4% drop in revenue.

In this table, energy subsidies stand out, which are up by a real 38%, mark 764,000 million dollars and are on the way to the long trillion. Entering it means entering an area that Christianity manages as its own fiefdom. Another area of ​​conflict, that of spending on social plans, says 28.9%, 630,000 million dollars and calls for an increase in the voices that are starting to run out.

This heavy, disastrous type is the legacy the government leaves the government. Finally, in whatever order, Alberto Fernández, Cristina Kirchner and Sergio Massa are part and central pieces of the same government and, often, responsible for the situation in which we find ourselves.

Probably, if not certain, it will be difficult to find in Kirchnerism a true, profound and in good faith self-criticism: they do not appear among their customs. There will certainly be stories of those who always put the ball out of their court even if they sound exhausted and less and less credible.