Two fundamental doubts and a certainty surround the beginning of Sergio Massa’s management in Economics

Two weeks after he formally assumed his position, he is there two doubts key e a certainty that characterize the beginning of the management of Serge Massa at the helm of the Ministry of Economy.

The main one is politics. and it could be summed up in a question: how long will the vice president last Cristina Kirchner and Kirchnerism in come out to question the fit which has made progress with the rise in electricity, gas and water tariffs, but which is complemented by the verbal commitment to respect the agreement with the IMF and which has as another verifiable fact the increase of 9.5 points in the interest rate who is now at 69.5% per year?

Kirchnerismo in his phase of “pragmatism” (This is how Eduardo van der Kooy highlighted it in Clarín) responds to the fact that with the precipice – and the fear it generates – near, the environment becomes digestible.

The vice president questioned the tandem Alberto Fernandez-Martin Guzman when it agreed with the IMF to lower the fiscal deficit to 2.5% of GDP (currently 3.4%), when they tried to reduce energy subsidies by increasing tariffs and when they promoted an interest rate hike despite the fact that the Central Bank could not prevent the loss of its reserves.

Now I haveAce Massa and stay in the background. That silence plays in favor of uncertainty about the level of support he gives to the measures, and the minister tries to mitigate that by saying he will receive dollars that are elusive for now.

Massa chose to reach 5 billion dollars of export advances to strengthen the Central Bank’s reserves which are lagging behind and the underlying issue on the markets continues to turn regardless of whether or not there will be a trade jump before the end of the year.

Even if the Central Bank ends a week being able to buy a few dollarsAugust continues with a low level of liquidations by exporters and with an increase in complaints about the lack of imported products and components.

Miguel Pesce continues to manage the shortage of foreign exchange with a level of net reserves which would amount to approximately 2,500 million dollars and with liquid reserves on a negative level.

If the minister maintains his position not to strongly devalue the weight for fear of a new one Inflationary flash, the certainty that is gaining space is the continuity of the policy of regular dollar update and the validity, but with a harder hand, of the change trap.

With different names, the set of decisions to generate a gobbledygook on rate hikeslimit the games for the provinces (but, at the same time, allow them to do so load gross income), promise to respect the lowering of the fiscal deficit agreed with the IMF (rampant inflation does the dirty work of liquidating salaries and pensions), trying to get a few dollars and accelerating the pace of devaluation below inflation, besides to increase rates, they are part of the Massa package.

Floor “Support”.“we are seeing it” or “try to get to the World Cup” of November are some of the names used by economists and political scientists in an attempt to graphically represent the precariousness of the official regime in progress.

The rise in dollar bonds and stocks in recent days, however, has ignited some light of hope in finance-related sectors that are betting on some improvement due to asset prices being at or below.

But uncontrolled inflation after a 7.4% cost of living rise in July fueled the forecasts is heading into triple digits every year (the REM estimates 90.2% by 2022) without anyone from the ruling party dares to say otherwise.

CGT leaders accuse businessmen and traders of not holding the government accountable, which generously issues pesos and lays the groundwork to open parity to a monthly discussion.

With an annual inflation of 90% and the expectation of a repressed devaluation, the gap between the official dollar and the free ones of the order of 120% becomes the barometer when setting sales prices. This also collapses the idea of ​​officials that the level of the blue dollar does not matter “because it is a small and irrelevant market”.

Markets, like Minister Sergio Massa, seem to adhere to the “we are seeing it” tactic.