For Álvarez Agis, Massa’s economic plan “is in three months of trial and one has already passed”

“These are difficult times. The consultant in Argentina is a firefighter and as firefighters we will not complain about the fire, “recognized former Deputy Economy Minister Emmanuel Álvarez Agis, who analyzed the complicated situation of the Argentine economy.

“We come from three ministers of economy in less than 40 days, an attack on a vice president, a super weird coalition dynamic on both sides of the rift, with a rather liquefied leadership on both sides. Or one says, in economics. it’s hard to have so many balls in the air, and I think Argentina has all the balls in the air today, so it’s hard to be certain, “said Agis.

The economist, who was among the men consulted by the current minister Sergio Massa, he expressed his opinion on the stabilization measures implemented by the former president of the Chamber of Deputies in the last month and a half. “You can call it a contingency plan, fire extinguisher, pragmatism. It is not an economic plan, it is simply a reversal of fiscal and monetary policy, which is important, because they were destabilizing the Argentine economy “.

“There is a lot of pragmatism in the middle of trying to build up reserves. Massa’s plan has December and March as a review point “, He assured Álvarez Agis, in a webinar organized by the consulting firm Adecco.

For the economist, “the first problem of all is, of course, inflation”. “We are entering another inflation regime and Argentina comes from three inflation regimes,” he said. Agis pointed out that prices rise month after month with a floor of 6% and that this is the same pace with which the Central Bank devalues ​​the peso. Also, paritarias are reviewed “every two or three months,” like contracts.

“Everything will go to 6.5% and there is no way that inflation can get out of that 6.5% low for the next six months,” he warned.

In this diagnosis, the reserve situation is what makes the engineering more difficult to reverse expectations. “The situation of the reserve is limit. Faced with this level of reserves, the government begins to discuss what to do with the three variables of economic policy: public spending, interest rate and exchange rate. The economy expanded in the first half but ran out of reserves. A car that went fast but without fuel, ”he exemplified.

In this sense, Agis underlined it “The government must avoid a devaluation and at the same time recompose the number of reserves. The Mass plan is a reversal of fiscal and monetary policies. Reversing the exchange rate policy would mean devaluing and this is the mother of all battles. A jump rate devaluation of the exchange rate of between 30% and 50% in this context it would be tragic ».

This is where Agis believes the soybean dollar comes into play: “It is the most salient measure of the plan. But it will only mean an increase in reserves in September. I think it will be difficult to go back and get producers to liquidate again in October.”

For the head of the consulting firm PXQ, there are two options for the future: “Either a devaluation or a split, which is what we are already starting to see with tailor-made schemes to accumulate reserves and avoid a devaluation with a discrete jump, because in practice the BCRA devalues ​​the peso every month. ”

According to the economist, if reserves exceed $ 11 billion in March, an expansionary monetary policy will follow and the government may have more or less luck in the presidential election. If in March it does not exceed 3,000 million dollars, the electoral chances for the ruling party are very low.

“In 2023, whoever wins, Argentina will undergo major corrections. Hawks, who are looking for a shock, and doves, who are gradualists, are everywhere. The possibility of the hawks depends on the social limit. And the ability for pigeons to make a gradual correction has to do with financial capacity. The statesman will be the one who finds a diagonal ”, assured Álvarez Agis.

YN