The lifeguard that Bolsonaro can launch in Cordoba

Exporters from Cordoba lit a candle, but not a saint, but the photo of President of Brazil, Jair Bolsonaro. It is this country that can offer a real life line to local production.

The giant Mercosur is important for Córdoba. It allocates 21% of its exports, including industries with an impact on employment.

In 2015 and 2016, the Brazilian economy collapsed by 7%, a fall that was halted in 2017 with a tentative 0.9% advance.

But by 2018, it would have improved by 1.3%, according to the first forecast of consulting firm Abeceb.

This was enough to ensure that, between January and October, local shipments to this destination ($ 1,396.50 million) increased by 78% over the same period in 2017, while total sales abroad had dropped 4%.

The Brazilian economy is forecasting growth of 2.5% this year and 3% in 2020, which is delighting the Cordoba industry. But for the lifeguard to arrive, Bolsonaro must meet expectations regarding his economic management.

Local impact

"For the Córdoba industry, it is very important to know what is happening in Brazil, which has had very bad years and where today we are talking about the recovery with a lot of enthusiasm, especially investments, which have accumulated eight setbacks since the beginning of the crisis, "says Marcelo Olmedo, president of the Córdoba Chamber of Commerce (Cacec).

His company, Promedon, has for several years marketed products for urology in the neighboring country.

Between January and October of last year, Córdoba's industrial exports increased by 125.3% year-on-year, with an increase of 191.6% in land transport (vehicles and auto parts), according to the agency ProCórdoba.

In the last year, the Argentine automotive industry exported 58% of its production? In this segment, seven out of ten units went to Brazil.

According to data from the National Federation of Vehicle Dealers (Fenabrave) of Brazil, in 2018, 2.5 million vehicles were patented, representing a growth of 14%. For this year, private screenings are talking about another 10% to 20% increase.

"The Brazilian market is growing rapidly, and in the case of trucks, projects of up to 40%, which opens up a 50% reduction in Argentina," warns Ramón Ramírez, CEO of Maxion Montich. , whose factory in Brazil produces chbadis for the Iveco subsidiary in both countries.

Last year, exports of primary products also increased, with a 26% increase in cereals, especially wheat.

Argentina produces just under 50% of its exports, of which more than 11 million tonnes, of which Brazil is the main destination.

"The best wheat is produced in the cold regions, so many Brazilian factories are mixing Argentine wheat with that of their country to improve the quality of the flour," said David Miazzo, Chief Economist of the Foundation for Agricultural Development. Argentina (Fada).

The risks

But the forecasts depend on the fact that Bolsonaro begins to solve the problems of the Brazilian economy, which presents some structural complications with Argentina.

Brazil has a primary fiscal deficit of 2% of its gross domestic product (GDP), with a debt volume that brings the total red of the public sector to 8% of GDP.

Reform of the pension system is another major problem. The new government will send to Congress a bill that includes increasing the retirement age and incorporating a capitalization system similar to that of Chile.

"But the advantage is that Brazil has no problems with the external trade balance, has a controlled level of inflation (about 4% per year) and there is optimism and confidence in the market that the government's program aims to correct problems, "says Marcos Muñiz, badyst of foreign trade and Latin America consultant Abeceb.

Another key to Córdoba is how the two countries define the future of Mercosur, whose nuance towards a free trade area will have an impact on the common market partners.

Cordoba: destination Brazil

125.3%. Between January and October 2018, Córdoba's industrial exports to Brazil increased by 125.3% compared to the same period in 2017.