The economist Marina Dal Poggetto. Photo Lucia Merle –
Economist Marina Dal Poggetto, executive director of the consulting firm EcoGo, warned on Saturday that while the government “continues to slide the official dollar and rates behind accelerating inflation and a meager balance in the Central Bank,” you will never stabilize ”the economic picture.
Dal Poggeto, who refused to be Sergio Massa’s Deputy Minister of Economy, said that “there is a problem with the balance of the Central Bank. You have advanced pesos in the economy and you lack dollars in reserves“.
So, “BCRA goes on without buying dollars, for the past three days it has tied up the account, but it has few net reserves and the question is how it gets dollars and what it gets them for. You make them increase their reserves or keep selling cheap dollars? “
The economist stated that the increase in the “tariffs of public services has not yet been implemented, when it will be gradually” in the statements to Dato sobre Dato of radio Milenium.
“The savings we calculate from this year’s rate hike is 115 billion pesos and a week later you gave pensioners a bonus of 120 billion pesos. The fiscal adjustment in the second half of the year will be due to accelerating inflation and some containment of spending, but it does not lead to stabilization“, He added.
He explained that although the BCRA raised “the strong interest rate, when you look at the Leliq rate which runs at 5.8% per month, they strongly raised the” subscription “rate, which pays very short-term pesos, and they have put together a mechanism that does not define how it will be implemented, which is that mutual funds bypass banks and can go straight to repurchase agreements to ensure they are remunerating the pesos.
In his financial and macroeconomic analysis, Dal Poggetto ensured that “the interest rate does not go above the devaluation, it does not go above inflation. It’s not high enough to do a stabilization program, but at this nominal rate it’s a very high interest rate that creates you a lot of pesos. if your problem is that there are leftover pesos and dollars are missing, you will have more pesos left and you will not get back the dollars. “
Another problem for the government “is the exchange rate gap,” he said. “If your marginal dollar is worth 300 or 350 mangoes, the main incentive is to go and buy as many official dollars as you can. The game of the last two years has been to get low prices in the cornered financial system, buy cheap dollars from the BCRA and if you’re lucky you can sell on the market at reckless prices. “
Imports are now “in an area of $ 8.2 billion and you have no dollars on the other side. It’s not like Argentina has run out of dollars. The transfer of income that generates a 100% exchange rate differential, half of the imports are subsidies and an exporter gets half the price, ”he explained.
With this rate of price increase and the fiscal deficit “the only thing we end up discussing is with what inflation and with what gap we get to a point where at some point it will have to devalue, the question is who pays the costs of this and my feeling is that the costs are paid faster and faster, especially if the fresh dollars don’t appear.
To get out of the current crisis, Dal Poggetto assured that “we need a stabilization program, the later it is done, the more expensive it is“.
He believed that “you have to devalue with more withholdings, but you cannot collect withholdings with this level of exchange rate gap”.
“You have to fill the gap, and you need a tax sign. In the short term, withholding taxes can help you. All stabilization programs require a long agenda. The point is when will you start doing it and who. It would seem that we will just continue to buy time ”, I conclude.
Source: Clarin
