Damien Kantor
07/03/2021 1:00
Clarín.com
Economy
Updated 07/03/2021 1:00
Exchange stability is
one of the government's crucial bets
with a view to the November elections.
It is logical, if the impact of the dollar on prices and the level of activity is taken into account.
A study by Eco Go indicates that “November is reached with an (official) dollar at $ 102.5, an exchange gap between 80% and 90%, the economy growing on average 6.9% and inflation around 50% interannual ”.
Economists make similar projections, but they emphasize the indicators that will mark the pulse of the electoral contest:
exchange rate, consumption, wages, employment, inflation and level of activity.
What some define as
"the sensation of the pocket"
to interpret the social humor. "The government's recipe is to inject money to recover consumption, but unlike other times, it is now finite," explains Guillermo Oliveto, from the consulting firm W.
To analyze these variables, the
Economic
spoke with Ricardo Delgado (Analytica), Belén Rubio (Abeceb), Fernando Marengo (Arriazu Macroanalistas), Lorenzo Sigaut Gravina (Equilibra), Marina dal Poggetto (Eco Go) and Guido Lorenzo (LCG).
What follows is a synthesis of the talk and the main conclusions.
Dollars)
Delgado:
A month and a half ago, the inflationary anchors for the Government were the dollar, rates and wages.
Wages no longer.
If inflation slows down, it is based on a certain exchange rate stability.
Although I do not see a problem with the competitiveness of the exchange rate.
The key to the movie is to keep the ceiling of the gap below 70% between official and financial dollars.
Lorenzo:
The strategy to remove inflation inertia is to delay the daily changes in the exchange rate.
Thus, we can project the official around $ 105 and below $ 110 in December, which implies that the gap may widen.
Still, I think it can be controlled if the tools are used well.
Sigaut Gravina:
The problem is not getting to the elections, but the day after.
After the entry of exports, the official plan is to spend part of the reserves so that the gap does not escape.
The dollar is not very competitive but it is not lagging either.
The big question is whether the subsequent devaluation is gradual or somewhat abrupt.
Wages and employment
Rubio:
In the first semester, the wage bill remained at the same levels as in 2020, this is 12% below 2019. Although there was an incipient process of recovery of total employment, it still did not reach the pre-pandemic levels and high inflation produced a deterioration in real wages, especially in the informal and self-employed sectors.
Despite increasing an average 4% above the second half of 2020, the wage bill has remained at minimum levels since 2011.
"In the last 3 years, wages in dollars fell 50%," says Ricardo Delgado, of Analytica.
Marengo:
Formal employment was frozen last year due to restrictions.
But a distinction must be made between unionized and informal jobs.
The latter is more dependent on economic recovery.
Any wage bid is nominal and depends more on economic recovery.
Furthermore, the Government is trying to apply a more expansive fiscal policy (subsidies, extraordinary bonuses and social spending) with the aim of recovering purchasing power and consumption.
Lorenzo:
Salaries could beat inflation during the 3 months before the elections, around 1% real monthly average.
From current levels, it is negligible, but at least they stop losing.
It's going to be more for the speech than the feeling of a recovery.
In the annual average, we project a 4% drop.
Delgado:
In the last 3 years, wages in dollars fell 50%. Until April, they registered a year-on-year drop of between 6 and 9% in real terms. Now, there is a political decision to ease the squeeze, encouraging joint agreements of between 40% and 45%, with the intention of rebuilding the real salary, with the idea that they will come to the elections somewhat more relieved.
Sigaut Gravina
: The government's objective is to put money in its pockets and for income to rise above inflation.
Wages come from three consecutive years of decline and also the level of employment.
When there is no work, there is no income or consumption.
The year started with inflation guidelines of 29% and wages with a rise of 35%.
When the rise in prices could not be moderated, the scheme was broken.
Possibly the real wage ends up tied or beating inflation very little.
Consumption
"Any salary improvement goes to consumption," said Lorenzo Sigaut Gravina, from the Equilibra consultancy.
Sigaut Gravina:
Everything goes up in employment and wages go to consumption. Something is likely to pick up. In addition, there is more supply of soft loans (installments without interest), and that is something that people can take advantage of to advance expenses. However, today, the indicators of confidence in the Government and the consumer are at the minimum and it is something that must be reversed and quickly to improve the chances of facing the elections.
Rubio:
Consumption moves at the rhythm of two trends: income polarization and the lack of standardization of the supply of products, in some cases scarce and intermittent due to the pandemic. Durable purchases normalized in the first half of the year and even represented an opportunity for those who made purchases to protect the value of their savings, given the lack of opportunities to hedge against exchange rate uncertainty. The second semester begins with clear signs of stagnation in the purchase of durable goods and construction supplies.
Dal Poggetto:
The wheel between inflation, wages, the dollar and rates is very uneven.
A portion of the wage earners managed to close parity above inflation.
But not all.
A part of the weights of the economy are destined to consumption, especially in those sectors that do not have other saving options.
Marengo:
In consumption you have to look at two things, the level of investment and the level of economic activity.
In this sense, there may be a few months of improvement, but not a boom.
Another important factor is the surplus of pesos and the dollarization of portfolios.
For example, companies that turn to buy machinery, which is a way of buying dollars at the official exchange rate.
Or people who buy durable goods (televisions or covers).
Slim:
Pocket feel is key to choices.
In this sense, consumption is in line with real wages and GDP.
With a slight recovery, after the violent fall of last year.
In net terms, consumption will be on the same or losing ground against inflation.
GDP and agreement with the IMF
For Fernando Marengo, the key after the elections is the agreement with the IMF.
Dal Poggetto:
A default with the Fund is not an option.
Not the Paris Club requires an agreement with the IMF as a guarantee to restructure its maturities, but China also requires it to support the disbursements to finance the investments it is carrying out in the country.
Delgado:
A very important economic variable is the vaccine.
With the population vaccinated against new strains, such as Delta, the uncertainty about potential closures decreases.
And it makes it easier for more commercial openings to take place and for the activity to move a little more.
Marengo:
The post-election key is whether there is an agreement with the Fund to avoid a deep crisis.
Stimulating consumption, a tool with no guarantee of success
"The second semester starts with clear signs of stagnation in consumption," says Belén Rubio, an economist at Abeceb.
For analysts,
consumption and votes go hand in hand
and it has a clear impact on social humor. "The government's recipe is known: it tries to inject money to recover consumption, but now that resource is finite," says Guillermo Oliveto, director of the specialized consultancy W. "What is clear - he added - is that the intention is to recover the economy ”, with a view to the legislative elections in November.
“Finito”, for Oliveto, means that the attempt to put money in people's pockets “
does not have the guarantee certificate of other times
”. The explanation is in sight. The consequences of the pandemic, even if a strict quarantine does not govern, impact on the will of people when it comes to spending. "
People do not go to shops out of fear
and they are right because of the scale of the tragedy," he says. Unlike 2020, today there is a greater degree of openness, but still people are inclined to avoid public places, such as restaurants, cafeterias and even self-services.
There is another side to analyze and it has to do with the loss of the purchasing power of wages.
“In the last year,
household income fell 11% in pesos and 43% in blue dollars
.
When people look at the cost of a cell phone or a kilo of Milanese, they wonder what happened? ”, Analyzed the specialist.
Oliveto says that what prevails today is the logic of the pandemic.
And he believes this will continue until vaccination plans advance and fear and uncertainty diminish.
"It is likely that between September and October, there are items such as bars, restaurants and tourism that are doing much better than last year."
Because in terms of consumption, desire and fear are opposed.
“The human being wants what is scarce.
And when it finds it, the consumption returns with fury ", comments.
From another angle, Javier González, an analyst at the Nielsen consultancy, highlights strong changes in the mass consumer business.
“Today
sales vary a lot depending on the channel
.
Supermarkets remain stable against last year, supermarkets are badly hit and there is a strong rebound in stores and kiosks ”, the expert listed.
They are comparative numbers against 2020, distorted precisely by the long quarantine and the restrictions to circulate and operate.
“Between April and June of last year, 25% of the stores were closed,” González clarifies.
The same happened with the kiosks, many of which could not sell normally due to the lack of public in the streets.
In terms of product categories, Nielsen posted a strong rebound in beverages and cigarettes.