For liberal projects, for populist consequences

As defined by the dictionary of the Spanish language in one of its meanings, a "symptom" is a "sign or signal of something that is going to happen or is going to happen". This is the accumulation of negative numbers thrown daily by the national economy. Symptoms of a crisis that becomes each time deeper and more painful.
During this week, there were four significant data. The first two were revealed by Indec and explain the recession that the real economy is going through. In the first two months of 2019, industrial activity decreased by 9.7% compared to the same period last year, while construction fell by 10.7%.
The third is provided by a report published by the Center for Political Economy of Argentina (Cepa), which reflects the difficulties faced by the largest companies in the country. It is no longer a question of the suffering suffered by SMEs and micro-enterprises because of the pace or the drop in sales, but the serious financial and employment problems faced by companies charging more than 1,000 million dollars a year. The list includes iconic companies such as Unilever, Arcor, Femsa (Coca Cola), Mbadalin Particulares, Mastellone or Molino Cañuelas, among others. Most of them have decades of history in the country and are directly related to mbad consumption. There is no more eloquent symptom of the collapse of demand.
The latest data published by the Chamber of Commerce and Meat (Ciccra) indicate that the average annual consumption of meat per capita is 54.5 kg. This means a decrease of 5.7% over the previous year and is among the lowest records of the last 29 years.
The answers proposed by management reside only in what the former Macrista official, Carlos Melconian, defines again and again as "Flintstones Plan". It is an agreed program between the Government and the International Monetary Fund (IMF), which is not aimed at growth or development, but only proposes to arrive without economic upheavals until the end of the year. in October. Basically, the premises consist of the authorization of the agency for the Treasury to sell dollars in order to maintain the exchange rate at the shelter, and in return, the Bank's commitment Central (BCRA) to further tighten the zero emission policy until the end of the year. . The plan helps so much to avoid the debacle, but it does not work if what one is trying to do is to contain the recession.

Mr. Fond's license
Time This is what Finance Minister Nicolás Dujovne and BCRA President Guido Sandleris have asked the IMF for this week during their visit to Washington. As the Fund is the sole source of credit for the country, each of the decisions concerning economic policy should be consulted with the agency. The officials hope that Christine Lagarde will allow them to postpone in October the battery of measures suggested in the technical report presented by the Italian economist Roberto Cardarelli to the IMF's board of directors, before the payment of $ 10.8 billion received this week. . In the letter, the political praise is combined with the technical "disappointment" generated by the few results that the program approved in September has shown so far.
More specifically, the Fund stresses the need to accelerate the reduction of energy subsidies and suggests a comprehensive tax reform including the revision of the monotributo regime, as well as the increase in the VAT rate for certain products and the Expansion of personal income tax (profits).
National officials argue that such measures are not feasible in the context of the current recession and before the electoral process. They badume that if it is necessary to deepen the adjustment, this would only be possible by reducing the funds to public works.
However, far from the optimistic forms, the agency said in its report on the global outlook released Thursday that Argentina would end in 2019 with inflation of 30.1% and a drop in the product 1.2%.

Liberal in the newspapers, populist in the facts
"The huge size of the state, which spends more and stifles the private sector in taxes, is largely responsible for the current situation of the Argentine economy." The phrase could be put in the mouth of any member of the national government, starting with the president of the nation and even to second- and third-line agents.
The recipe according to the diagnosis is well known in our country. Reduction of public expenditure, tax reform (reduction of taxes), flexibility of work, blind opening of the trade account and the capital account and orthodoxy of monetary policy. Liberal ideas continue to be supported by official rhetoric, even in the midst of the current situation.
"From the saying to the fact that there is a long way" thought the grandmothers of yesteryear. Indeed, to contain the consequences of the liberal recipe which, according to the government, would apply from the beginning of the administration, the economic team plans to implement, on its return from Washington, a series of measures. heterodox of those governments that some insist pejoratively, calling "populists".
What justifies the pragmatic shift is the data provided by the Macroeconomics Committee (see infogram). The first quarter of 2019 did not offer a single positive balance sheet compared to the economy. The set of variables reveals that businesses and consumers (the main drivers of aggregate demand) are at a critical juncture.

To contain the situation and given the imminence imposed by the electoral calendar, the government is running a series of measures to encourage consumption and credit, which would add to the 46% increase in allocations announced by the President in March. The first is the extension of the loan program offered by ANSES to retirees and retirees. Amounts currently between $ 5,000 and $ 80,000 will be doubled and a subsidized rate of between 44% and 54% will be offered.
The second is to strengthen the Procrear Plan by extending the amount of the grant, focusing on the low-income sectors with a UVA system.
The third is the extension of the Care Prices program, launched by Kirchner in 2012, which currently has 566 products and would be renewed from May. However, the controversy arose with the bill introduced by MP Elisa Carrió, aimed at defending competition in the food chain. The initiative can be translated as "gondola law" and is nothing more than the old and known "price control" which contradicts the strictly monetarist point of view that in the government (to which Carrió belongs ), take into account the causes of inflation. To complete the picture, it was learned that the government was planning to announce the price freeze of 40 staple foods, which ultimately resulted in a broad price agreement to be announced on Wednesday. The measure would have been agreed with supermarket chains and would include reductions ranging from 10% to 15% for retirees and pensioners.
Finally, sources close to the Ministry of Finance say that despite the IMF's categorical refusal to use the Central Bank's reserves to contain the exchange rate, the government is determined to take all necessary measures to contain the dollar, knowing that the implications that a new episode of trade instability could have in terms of price level. This is a weapon already used by the government in 2018, which has shown little results to contain it and that has resulted in the departure of the former president of the BCRA, Luis Caputo.