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Financial Times' crude economic analysis after STEP 2021: 'Too early to celebrate'

2021-09-14T22:58:44.192Z

Despite the defeat of Kirchnerism, the British newspaper warns of a possible "turn towards more populist policies."



09/14/2021 7:34 PM

  • Clarín.com

  • Economy

Updated 9/14/2021 7:34 PM

The

Financial Times

devoted an extensive column to the current situation and the economic direction of Argentina after PASO 2021. Despite the defeat of Kirchnerism, the traditional British media warned about a possible "disappointment" for investors and the resurgence of "populist" measures. 

"It is too early to celebrate; the poor result of Alberto Fernández's left-wing Peronist party does not necessarily herald better economic policy or an opposition victory in the 2023 presidential elections," the Financial Times column noted.

The analysis was carried out by Michael Stott, editor for Latin America of the publication, under a forceful title: "Uncertainty looms over the political and economic future of Argentina."

Stott pointed out that Sunday's results could seem like "good news" for those who expect a shift towards more orthodox initiatives, but said that Argentina could once

again "disappoint investors."

The Financial Times also warns of possible fights within the government.

"An unexpected and resounding defeat of the government in the midterm primary elections could seem like good news for investors, with the hope that Argentina cut spending, reduce inflation and reach an agreement with the IMF to restructure a debt of 45,000 millions of dollars, "Scott said.

However, he warned that the result "in the short term could provoke a

shift towards more populist policies

.

"

Although the government's margin to increase public spending is "limited" due to the inability to access international markets, "there is room for

unpleasant surprises."

Among those "surprises" he mentions a "waste financed by printing money", greater intervention in the economy or ruptures between pure Kirchnerism and the sector loyal to the President.

In addition, he stressed that "the opposition has its own problems", especially due to the "mismanagement" in the last two years of the government of Mauricio Macri.

The reasons for the defeat and what will come

The Financial Times also left its interpretation on the results of PASO 2021, in which Together for Change defeated the ruling party in the main provinces of the country.

The main explanation found in the

economic news of the country

, "Fernandez inherited an economy in recession, but did not fulfill its promises to reduce

poverty

and improve living standards Poverty has increased while.

The

inflation and unemployment remain high

".

In addition, he highlighted the

Olivosgate

scandal

, with the photographs that the President and Fabiola Yáñez took with guests at the presidential residence while there were strong restrictions on circulation due to the coronavirus pandemic.

And experts consulted by the newspaper also mentioned the

VIP Vaccination

.

The Minister of Economy, Martín Guzmán.

The Financial Times casts doubt on the direction the government will take.

This "uncertain panorama", adds the Financial Times, explains the "muted initial reaction" in the financial markets after the opposition's victory in the primary elections.

It is that on Monday, the day after the elections, the markets enthusiastically welcomed the victory of Together for Change, which came out of all expectations:

Argentine stocks rose more than 15% on Wall Street

, the Merval climbed 5, 5% and country risk fell 3.2%, to 1,490 basis points.

However, this Tuesday - just a few hours later - the roles of the main Argentine companies in the New York square fell back.

And the S&P Merval index lost 1.3%.

Meanwhile, amid pressure and strong public questioning of hard-line Kirchnerism, Alberto Fernández is preparing economic announcements for the next few days.

LM

Look also

The Government prepares economic measures and there is pressure from the K for the return of the IFE

Economists presage populist measures, but with limits due to lack of financing

Source: clarin

All business articles on 2021-09-14

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