In the Ministry of Economy they assure that the conditions are in place to
consolidate the disinflation underway
, even when there are setbacks in the corrections, in Congress or even tensions in the world economy. Unlike 2018, when Mauricio Macri faced a crisis that found him with an appreciated peso, today the Argentine economy is “on a different trajectory,” they explain.
“The Government implemented a monetary and fiscal adjustment, the exchange gap falls, the Central Bank accumulates reserves, there are twin surpluses and exchange controls
. ”
In 2018, on the other hand, they remember, the Government had just applied two years of
fiscal gradualism, the price of the dollar was floating, the stocks did not exist and there were twin deficits
. It was more vulnerable.
The memory of that setback for Macri is like the phrase
'he who was burned with milk sees a cow and cries'
. "Here we are not talking about a backwardness of the dollar - the Government immediately corrects - but we are talking about a
logical appreciation of the peso after starting from a higher exchange rate than expected
by the market." In December the official dollar went from $380 to $851.
The Government played in this instance to maintain the rate of increase of the dollar at 2% monthly (crawling peg) to contain the passage to prices of that devaluation, while at the same time they rearrange the rest of the prices, thus raising the inflation rate, the Exchange competitiveness will depend from now on on domestic inflation and the dollar worldwide.
The US currency appreciated 4% in one month.
This week will be crucial to find out more about the latter when the
IMF Spring Assembly begins in Washington
. There the organization will publish the growth estimates of the main economies of the world and Argentina. Publicly,
the organization will once again praise the Government's progress in reducing inflation and the measures adopted
. Privately,
he will reiterate his comments about the level of the exchange rate and the need to define a roadmap on the exchange-monetary scheme
despite Thursday's announcements to remove some restrictions and lower the rate. The IMF prefers more flexibility in exchange rates to face macroeconomic swings.
The dollar globally could appreciate more in the coming months. This week the director of the IMF, Kristalina Georgieva, commended the world's Central Banks
not to lower rates to ensure control of inflation.
A peso aligned with a stronger dollar will increase the cost of inputs used by local industry. An estimate from the consulting firm Equilibra says that if the current dynamics are maintained for the rest of the semester (the prices of regulated services continue to rise, the dollar increases at 2% monthly, there is a salary cap and inflation remains at 8% average per month ), “
the real exchange rate would close the first semester almost 15% behind its historical average
and just over 25% below the balance indicated by the IMF.”
The economic team responds that all these accounts overlook the fact that, unlike other times, the main anchor of the current model is the
balance of public accounts
, which slows down the pace of issuance and the chances of those pesos seeking refuge. in the dollar.
“The BCRA lowered rates and nothing happened.”
In any case, economists such as Miguel Kiguel and Andrés Borenstein maintain that Argentina should cautiously adopt an
exchange rate band scheme to cushion impacts
and even more so if the stocks are lifted. Although they see the latter for July “and in installments.”
The Government is betting on reaching single-digit inflation this month. They say that this would help offset the appreciation of the peso and thus there will not be another devaluation jump.
“This time is different
,” wrote economists Ken Rogoff and Carmen Reinhart about 800 years of financial crises. Will it be this time in Argentina?
The Government says yes
.