The government has failed to define an economic program. Beyond the
multiple dialectical errors of the president and the curious diplomatic
alignment that Argentina has been taking, the truth is that while the world
is at full speed thinking about the post-pandemic, Argentina seems trapped
in a labyrinth that includes short-term decisions with electoral
objectives, and visions of the economy that were already old in the last
century. As when it is claimed that capitalism did not have good outcomes
or fights against the agribusiness sector even signaling that private
property seems to be questioned.
The Economy Cools Down: When Does the Recovery Return?
The economy cooled down, there is no doubt about it. In March, activity
fell 0.2% monthly without seasonality, despite the market consensus
expecting a rise. But with the worsening of the health situation and the
imposition of new restrictions, the EMAE numbers for April and May will be
worse. Construction has been contracting for three months and the Industry
did not recover from the decline in February. Consumer confidence is in
decline and restrictions have deepened the drop in consumption. In this
context we ask ourselves: when will recovery return?
The External Sector Will Give the Central Bank Space in 2022
So far this year the Central Bank has bought USD 5,880 million reserves in
the foreign exchange market. At this point last year, the Central Bank had
sold USD 567 million and in the whole year ended up selling USD 4,169
million. Of the total purchased, only half went to increase the
international reserves stock, since it sold USD 672 million to the public
sector, paid to international organizations (another uses of the public
sector) for USD 1,243 million, lost USD 417 million for reserves and USD
644 million in the item other than includes the price movements of the
yuan, gold, and the use that the Central Bank makes to intervene in the
blue-chip swap market.