Economists presage populist measures, but with limits due to lack of funding

Economists believe that following the results of PASO, the government will encourage populist measures in the short term, with the idea of inject money into the pockets of the most affected sectors. In fact, announcements are already expected for this week. However, they warn that the executive branch will face limits in this task. And that sooner or later he will have to seek an agreement with the International Monetary Fund (IMF).

“The government is going to take populist measures, it will surely put money in the streets by November, this that’s what they know how to do. There will be steps to grow bank loans, no more plans, More than that, price control for inflation, ”assumes Miguel Kiguel, former undersecretary of finance and director of the consulting firm Econviews.

“They’re going to put money in people’s pockets for the next 60 days, but still within the limit of the financial constraint, given by the limit of monetary financing given by the organic charter of the Central Bank and by what they can obtain in net financing on the local market ”, according to Federico Furiase, director of the consultancy firm Anker Latin America.

“The alternative to radicalization is pure nostalgia. Going back to a post-2009 epic (the government lost the legislative elections, but won the 2011 presidential elections) is impossible, because the basic conditions do not exist ”, explains Ricardo Delgado, chairman of Analytica.

“There is no financing capacity neither in pesos nor in dollars, which is why no expansionary spending policy can be pursued, because the demand for pesos is already at the limit and the dollars, unlike in 2009, are no longer in the reserves, ”explains Delgado, who was also undersecretary for the Coordination of Public Works between 2016 and 2019.

The hypothesis of certain private sectors is that the government will increase the amounts of social and assistance schemes, pensions. increase public sector wages, everything to achieve a rebound in consumption to improve the chances of the ruling party in the legislative elections.

Expansion policies will imply an increase in monetary emissions. Economists doubt there is any scope for such a strategy. “May complicate access to finance, the to roll of Treasury debt maturities, ”observes Delgado. Back, making an analogy with Kirchnerism in 2009, he adds that “the boxes they had before are no longer available, there is no AFJP, which subsequently became the ANSES guarantee fund. . There is nothing like it ”.

After the elections, the economists consulted presume that it will come The moment of truth “, which must reach an agreement with the IMF. ” It will be necessary rearrange relative prices (rate, gasoline, exchange rate), because the Central Bank has no reservations. I believe that an agreement will be made because there is no other. Not to do this is to be an outcast. Despite everything, we are not going to get there, ”Kiguel assures us.

“The most desirable thing would be to push forward a deal with the IMF, trying to agree with the opposition. This agreement will have to go through Congress, as requested by the IMF. This will lower expectations of private devaluation, avoid violent surges in the exchange rate, It will also be used for an inflationary policy mediocre but not explosive”, Delgado.

“I do not see a break with the IMF,” predicts Furiase.

The next two years of Fernández’s administration are unknown, which will begin to be resolved if a deal is reached with the IMF. “Within this agreement, one of the key variables will be the level of reserves, it will be one of the conditions of the agreement“remarks Delgado.

“The agreement with the IMF will be more complicated because the new director, Ilan Goldfajn. Is a very orthodox economist,” observes Kiguel.

President of the Central Bank of Brazil (he has this nationality and Israeli), Kiguel depicts him as “(Federico) Sturzenegger from Brazil: very hard on interest rates and inflation. There will be no program light. Let’s see if it’s with (Martín) Guzmán, whom they know. It is a difficult dialogue, but directed. Negotiating is not easy, and even more so if it is a new person who can upset him a little more, ”he describes of a scenario of a possible replacement of Guzmán at the Ministry of the Economy.

BORN