Risks for the Government of 'putting more pesos in people's pockets'

Gustavo Bazzan

09/14/2021 7:19 PM

• Clarín.com

• Economy

Updated 09/15/2021 7:47 AM

In two months, the Government will be able to verify if any of the measures that it is cooking over high heat to serve them as soon as possible, had an effect at the polls.

The menu is known: it's called

"putting money in people's pockets

.

"

The candidate

Leandro Santoro

added an extra plate:

"Putting dollars in the Central Bank."

Official plans (or wishes) come at

a difficult time to place such bets.

With tariffs frozen, the dollar trampled on, meat stocks and price controls,

inflation remains high

. The 2.5% that the CPI rose in August is accompanied by a disturbing figure:

core inflation

- that of more or less free prices - was higher and reached

3.1%.

Also, if food rose much less than average, it was seasonal. It is not certain that they will remain calm between now and November.

The risk of putting more pesos on the street was recognized long ago by the Minister of Economy,

Martín Guzmán

, when he explained to his own troops that the issue is the main cause of inflation. The extra pesos that will be poured into the streets between now and November could put a little more temperature on prices, and who knows,

on the blue dollar.

High inflation and volatile dollar, two variables that have a

central impact on the pocketbook and on the social mood when voting.

In fact,

the “IFE yes” or “IFE no” discussion

reopened a rift within the ruling front, which for now does not seem to be closing.

It is the discussion about how many pesos to put in people's pockets.

And there is also the effect of more pesos on the Central Bank, which will have to issue more Leliq to absorb those pesos.

A point that, paradoxically, can help the Government, has been heard in conversations by economists at this time.

The opposition's triumph can help in the short term to

cool the exchange anxiety.

In fact, on Monday after passing the blue dollar fell a few cents.

But it is still a detail.

It is well known that "electoral eve" are in times of crisis, synonymous with exchange rate tension.

The Government will surely try to

"play strapping"

with the peso helicopter, but perhaps not so much strapping.

Which explains the

narrow gorge

why he is forced to advance towards the legislative elections.

If you put a lot of pesos, there is a

risk of exchange or inflationary sparks

.

It is true that the distribution of pesos today will be noticeable in a few months in inflationary terms, although perhaps that time will be shorter if you look at the dollar.

On the other hand,

if you hold back, it will be more difficult for you to get the votes you missed on Sunday.

A separate paragraph for Leandro Santoro's desire to put more dollars in the Central Bank, that is, to increase the reserves. This year, with the soybean price boom, it was not enough. With the Special Drawing Rights of the IMF (4,300 million) either. In truth, those dollars would quickly return to the IMF in the form of debt payments.

What will Santoro imagine: More stocks on the solidarity dollar? More stocks on imports? More withholdings on exports? Take hold of the reserve requirements of dollar deposits?

. Maybe he doesn't even know it.

All this looking to the next two months.

But the Government has two more years ahead of it until December 2023. And as of Monday, November 15, with the numbers already in Deputies and Senators, it will have to see how it continues.

If the results of Sunday are repeated, that "how's it going" could be without its own quorum in the Senate and perhaps as a second minority in Deputies.

Very difficult the next two months.

Very complicated the next two years

.

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