How the loss of pensions and the rise in rates are paying the bill for the agreement with the IMF

This is a technical report on how

managed to fulfill the agreement with the IMF at the end of last year.

The work contains very careful words but the conclusions are resounding and with a bleak outlook regarding the government's chances of achieving a reduction in the fiscal deficit in the electoral year.

Concepts such as

, "accounting trick" or "cosmetic" make clear the government's fiscal actions in the second part of last year when the jump in inflation allowed the Treasury to cover up an important adjustment in the accounts, the one that Cristina Kirchner had questioned former minister Martín Guzmán.

The report by the consulting firm

(Diego Bossio/Martín Rapetti) maintains that in 2022 the primary fiscal deficit was reduced by 0.7% of GDP and thus the government managed to exceed the goal with the IMF by obtaining a deficit result of 2.4 % of GDP.

He adds that there are two determining reasons for the drop in spending that were "the cut in social benefits and the low execution of

."

In other words, the adjustment in real terms of retirement and pensions and kick forward energy subsidies together with the segmented increase in electricity, gas and transportation rates.

In the case of

, the work indicates that "they

and "family allowances fell, deflated, 42%".

The

although, he clarifies, that part of this reduction was generated in the "segmentation of rates and the reduction of production costs."

The fiscal adjustment was strong, especially in the second part of 2022 when inflation shot up to aim at 94.8% per year and eroded retirement and other social benefits.

A question revolves around whether the government will be able to meet the

this election year, which would imply a greater adjustment in public spending and a higher level of collection.

Will there be more creative accounting or the like?

The answer is pending but it is worth analyzing some indications.

The forecasts agree that as a consequence of the

fewer dollars will enter for agricultural exports.

The question revolves around the scope and the decrease in the amount of income.

Estimates of losses due to the drought range from

to

and, in addition, Minister Sergio Massa has already resorted to

(1 and 2 soybean dollars) that would have advanced the income of foreign exchange from exports and has in mind game the repurchase of global bonds that could take

from the reserves of the Central Bank.

In the last rounds, the Central Bank sold more dollars than it bought while the market maintained the upward trend

. 

The blue at $386 registers

and marks the level of uncertainty around the government's ability to manage the exchange market, which during the week demonstrated marches and countermarches in politics to face the possibility of an excess of pesos going around the market.

The Central Bank first increased the overnight repo rate for mutual investment funds to place their liquid surpluses, but after a few hours it had to moderate that increase due to the

because that implied a threat to the capture of funds via remunerated checking accounts.

Paradoxically, this episode brought to light the labyrinth of the peso market that, given the surpluses in companies and the lack of demand from the private sector, has the Central as the

that sees everything and tries to contain the leaks and leaks into a highly capped foreign exchange market.

The Central Bank issues pesos through a window that goes to a market that seeks to avoid them by placing them in a fixed term or common investment funds that at the end of the day will lend them to the Central Bank in pass operations for 24 hours or Liquidity Letters that Thus, they accumulate liabilities (exceeding $1.6 trillion) that accrue monthly interest that averages 6% per month.

The

continues to grow and becomes gigantic in the face of an economy that tends to slow down.

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