Upset by the Fund's "inconsistent" forecasts

While the International Monetary Fund (IMF) undoubtedly plays openly for the reelection of Mauricio Macri, the latest developments in this close relationship have begun to trace some "crack" between the credit agency and the government.

Specifically, after approving the fourth revision of the program with Argentina, the Fund has recalculated several projections of key variables such as GDP and growth, to name a few.

The IMF, although in every statement applauds the progress made by this direction in terms of fiscal adjustment and monetary compression, is becoming increasingly pessimistic with Argentina.

The vision expressed in the scorecard by officials in Washington has made the government uncomfortable. It appeared that today, in official distribution, they criticized the Fund's forecasts as "inconsistent".

"We do not agree with many of the numbers they published in the magazine, and they do not understand what they wanted to do," said one official.

Silent critics should mainly focus on the near-zero growth they expect for next year: the agency has reduced GDP in 2020 from 2.2% to 1.1%.

Originally, in June 2018, the IMF had recorded a growth of 2.5% for Argentina. Then it reached 2.7% in December of the same year..

"They're not consistent with past projections, you can not go from 2.7% to 1.1%, and it's foolish to give a number, because the scenarios will be very different if we win or if Fernández-Fernández introduces themselves, they are highly played predictions that can change depending on how the elections take place ", they limit in the official halls.

"They have internal contradictions, which gives the impression that they wanted to reverse the two possible scenarios, a very bad one that would be the triumph of Kirchnerism and another positive one that would be the re-election of Macri, and that came out Something "inconsistent", we heard in the government.

Pessimism or internal coverage?

The Fund was pithy with its prospects for the future and this has led to unrest within the ruling party. Based on the data and comparisons, and taking into account what they thought in the third review (April of this year) and in the most recent, some changes are observed "for the worse".

With regard to this year's changes, there are not many complaints that could make sense. The fund recorded a 1.3% decline in its economy this year (compared to 1.2% in April), which is quite in line with the market expectations survey ( REM) carried out by the Central Bank.

But the biggest divergence concerns what the market expects for 2020: it shows growth of 2.2%, according to the EMN. This is what the government wants to criticize the Fund's figure while official estimates speak of a 3.5% increase in GDP, a very optimistic forecast that seems difficult to achieve.

The scenario of the agency for next year, if it was realized, would be that of a fairly punished economy and with little chance of recovery.

It sharply reduced private consumption growth from 6.6% to 1.3%; It has also increased the estimate of inflation from 21% to 32% for next year. In finance, they estimate that the CPI will be 25%, which is more consistent with what the market calculates via REM or FocusEconomics.

"They are notoriously more pessimistic about the economy next year, but it seems to me that it's a little hasty because we do not know what will happen in the elections.. I believe that the fund would only be covered in the event that the worst possible scenario would occur, "they add, of the official distribution, stating that this would happen in case the Kyrnerism returns.

For the government itself, the projections do not make sense because the election result will mark a before and after. In the meantime, relations between the Macri government and the Fund are intact, to the point that the agency has made BCRA's intervention more flexible in the futures market. Beyond the more or less overwhelming numbers, agency staff continues to badist the ruling party.

The mystery is what will happen in the relations between Argentina and the IMF if the formula presided by Alberto Fernández and Cristina Kirchner ended up winning the electoral contest..

Beyond that, there will be a dialogue, as it started now and even more, because whoever wins should renegotiate the program, the key will pbad through a no less minor obstacle: next year there will be elections in the United States and Donald Trump will go for reelection.

Therefore, the axis of the controversial President of the United States will not be clearly Argentina. In this order, Trump "serves" more to re-elect Macri than to deal with Fernandez, who criticized the relationship between the United States and the Fund with the current government.

"We will have the corresponding relationship with a country like the United States. You must live together, Simply, you must respect yourself. If we live with a president like Bush, how can we not live with Trump, "said Alberto Fernández in an interview in TN.

Far from the hugs and glimpses that macro-economic power has with the world's power, which ultimately contributed to the Fund's $ 57-million mega-disbursement, the relationship could begin to from December. And not because of the differences between the projections on one side or the other.

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