If the short blanket was what symbolized the dilemma of economic policy since last July, political timing and self -reignified defeat in the province of Buenos Aires for insisting on plebiscite everything, printed another dynamic to the game of markets against the electoral clock. The legislative stroke against the presidential vetoes also contributed to a different political climate and the siege of the fundamentals of the economic program. The markets responded in their language: with the Central Bank intervening with a super sale of US $ 379 million to contend the buyer wave.
On guard. Until the end of June, the chronic shortage of dollars was not perceived, perhaps because the exports of grains that took advantage of the temporary removal of retentions, then turned into permanent and ended with extra settlements in July still flowed. The antidote to stop the demand for currencies for import growth (+34% year -on -year in July) but especially for more treasury of private printed change in expectations was to absorb the monetary supply overflowed by the end of the Lefi with which they tried to contain, with a super interest super rate. Coincidentally or not, it is in June when the economic recovery that transformed a principle of economic growth into a new rearrangement of the variables after the great recession of the first semester of 2024 begins to slow down.
For the economist Sergio Rodríguez Glowinskidirector of Ingeco Argentina, the reverse suffered in the Buenos Aires elections in early September operated as a turning point and the budget became the platform to show a strategic turn. “Without abandoning his dogma of fiscal balance, the president sought to soften the narrative, reinforce spending in sensitive areas and hold bridges towards governors and legislators,” he says. But it warns that the main challenge will be, to turn any promises into realities without altering the pillar of the current economic program: the fiscal surplus.
In another perspective, Marina Dal Poggettodirector of Eco Gopoints out a problem: incentives for the next election are not aligned. “From the economic, the first measures aimed to reduce the monetary squeeze lowering the reference rate that they are fixing from the simultaneous wheel”, He adds. The Government reduced the interest rate to an annual nominal rate of 35% in more than 1,000 basic points. What is sought is to stop the drowning of the credit in pesos, which accumulates a real deterioration of 0.8% in the month, mainly due to the decline of commercial credits for the second consecutive month and the consequent impact on the credits destined for consumption.
The circuit. Until now, the increase of the dollar of almost 15% since July did not have its direct correlation in prices. The first estimates of inflation made by Eco Go threw a projection of +2.4% for September, a landslide with respect to August (+1.9% according to INDEC). The first alert signal came with the official wholesale prices index: +3.1% for August, which could indicate a turning point about the inflation deceleration process that had put it around 2% monthly since last May.
In a true career against the clock, almost stopping penalties (that is, trying that the bleeding of dollars can be sustained in what remains to the elections), the question that arises is whether the government has a rest to achieve it. Eduardo FracchiaIAE economy professor, you don’t see that these days there is room to change something of the short -term economic program. “A possible correction would consist of modifying the exchange policy in the medium term, either with a total release, that is, that the dollar floats or with a higher band much higher than the current one”forecast. But he warns that it is the rest will be to continue deepening the fiscal surplus and try to buy reservations that he qualifies as “A pending subject for country loss.”
Data kills story. As the political scientist shows Ignacio LabaquiUCA researcher, since 1983 in all mid -term elections, The ruling official never took more than 66 benches in deputies (1993) and the most recent victory was that of macrismo in 2017 (61). But I could have a performance like 2013 or 2009: 42 and 43 benches. The electoral climate, the Plateau of economic activity and the exhaustion of the restriction in spending generates an electoral climate that moves the most realistic expectations of optimism prevailing last May, when the dollar did not appear as a problem on the horizon, the recovery marched without hurry but without pause and was crowned with the victory in the local elections of the city of good air.
Economist Fernando Marull recalls that since March that the activity does not grow, precisely when the exchange regime changed (it went from the “Crawling Pira to the bands). “Transitarily increased inflation and rates, but there was a benefit of a higher dollar, more reservations for the IMF contribution for the previous electoral, although these benefits today are not displayed.” The moral, in his opinion is that the frequent change of exchange regime has its costs.
From Monday 22, 25 business days remain that the economic team counts from A. When the dollar touches the “roof” of the exchange band, the Central Bank must go to respond with what has least: dollars. A tension that will last, once again, these days until new winds blow, to convert the “untouchable” economic program to an instrument to adapt the new reality to the extent that the negotiation supplies to the frontal clash. Meanwhile the “market” will continue to vote daily.
