On the labor front, the survey by the Ministry of Labor showed that, in March, registered employment recovered 0.3%, compared to the previous month. The interannual variation stood at 4.5%, while the variation compared to the levels of March 2019 was 3.3%. In year-on-year terms, the greatest variations were independent (+8.6%) and private wage earners (+3.7%). Also, in April, it was reported that the average taxable remuneration of stable workers (RIPTE) was $128,406. That is, it showed an acceleration of 59.5% nominal annual and a real one of approximately 0.9%.
At the level of activity, the INDEC indicated that, in April, industrial activity grew 5% monthly, while the annual increase was 4.7%. On a year-on-year basis, the division with the greatest increase was Clothing, leather and footwear (+40.4%) followed by Motor vehicles, bodies, trailers and auto parts (+25.1%). In April, for its part, construction showed a (monthly) increase of 5.4%, recovering from the fall of 4.1% in March. Year-on-year, it presented an advance of 8.8% and is 5.3% above the levels of 2019. At the same time, in March, jobs in the sector showed an increase of 18.4% compared to March 2021, but are still 6% lower compared to 2019. It is expected that the figures for the coming months will reflect the energy crisis.
All of this against the backdrop of the IMF, which confirmed that the quantitative goals for the first quarter were met (next disbursement of US$4.03 billion). Although the variables that are considered affected by the shock of the war in Ukraine will be reviewed. One of the variables to review will be the inflation target, which had been agreed at 48% for all of 2021 at the end of March. In terms of (national) inflation expectation, the BCRA survey reflected that inflation for 2022 is estimated at 72.6% and, for 2023, the expectation moves by 60%.
The crisis in fuel supply and the absence of solutions that lead to a quick exit are putting a brake on a large part of the production chain. Worse still, the political conflicts surrounding the bidding and construction of a new gas pipeline have transformed a temporary problem into a difficulty of greater proportions. Apart from this, international gas and oil prices exerted pressure, accumulating increases of more than 15% in the last 30 days. In this way, the possibility of supplying all energy needs becomes more complex.
Last week, 5% of the capital came out of the CER Common Investment Funds, accumulating an outflow of almost 9%.
What is deduced? Simply that the market does not discount changes in the conditions of said bonds from the next administration. Due to its transitory nature, the country risk had the highest value since the debt restructuring in September 2020 (exceeding 2,000 basis points since then). Likewise, in the local debt market, the end of the calm is observed, given that a large amount of the funds that were in positions in pesos migrated to the parallel dollars. In this way, the CCL dollar saw its biggest daily rise in more than a month, with a jump of 4.5%, and extended the wholesale gap until it reached 80% again.
In short, given this scenario, the accumulation of reserves is at critical levels (total stock of net reserves of approximately US$2.8 billion). And, considering that at the end of the month the IMF will receive US$4,000 million, but a total of close to US$700 million will have to be paid, the goal of reaching US$6,425 million in reserves, by the end of the first semester and in the absence of extraordinary disbursements, it would be possible only by capturing more than US$190 million per day. In short, failure to meet this goal would be likely.
Added to the lack of confidence is the loss of monetary policy tools. The stocks against the dollar are no longer effective in containing the spike in parallel prices, price controls do not reduce inflation, and now the CER bonds will not be enough to attract the total amount of funds needed. Faced with falling prices in the secondary market, the Treasury will have to find a way to increase the incentives for the local debt that must be refinanced, with an agreement with the IMF that no longer serves as an anchor. In itself, innocuous changes on those same goals for other more lax and achievable ones will be simply a nominal matter. Far is the normalization and correction that the fundamentals of the macro demand.
*Federico Pablo Vacalebre is a professor at the CEMA University.
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by Federico Pablo Vacalebre*
