Updated 02/13/2021 12:10
The Government and the International Monetary Fund affirm that the negotiations on the debt are "very constructive" and that they seek to reach the objective of closing a program in May, although the director of the organization for the region said this week that
that goal was "very ambitious ”
On Wall Street, they also view that date with enormous skepticism and believe that a deal could be delayed even after the October elections.
Investors and analysts consulted by
pointed out with concern that the macroeconomic problems are far from being resolved and that the Government is not determined "to change the course" of its policies.
Guillermo Mondino, director of the investment fund Mogador Capital stated: "The IMF and the Government have spoken of May as a possible deadline for a program. However, the Director of the Western Hemisphere, Alejandro Werner, put cold cloths on it on that date, saying it was very ambitious. That, in IMF language, tells us that the government is a long way from proposing a set of policies that the Fund can support. Normally, when there is already a certain economic framework, a program with the IMF is' cooks' in a few weeks. However,
here we talk about months
as an ambitious goal. That something is telling us. "
Simultaneously, Mondino said, “what is observed, both in fiscal and monetary policy and in the results of these, such as inflation, growth and fiscal results, suggests that
macroeconomic imbalances are very far from underway
And He added: "He should wait for a correction in the course of macroeconomic policies so that the IMF can support them and to validate the goals of Minister Guzmán.
But is the government coalition willing to change that course?
I think the answer is no".
The financier also indicated that “it is highly probable that the Government will use the possibility according to the IMF as a sedative for expectations to test how things are going.
If the exchange market holds them and they manage to buy dollars, I do not rule out that May we will go to June and eventually leave it until after the elections.
In other words,
the relationship with the IMF will be 'let's see'
. "" If they can get away without agreeing with the IMF before the elections, "Mondino continued," they will.
This, despite the fact that the costs of delaying an agreement are extended and that it is increasingly costly to resolve the multiple economic imbalances ”.
For her part, Siobhan Morden, from the
Ahmerst Pierpont Securities
, wrote a report entitled "The risk of a delay in the IMF program until after the elections."
The analyst points out there that “Argentina urgently needs a boost to confidence and bondholders continue to wait for a
coherent economic program
The normalization of relations with the IMF is essential not only to postpone onerous bilateral and multilateral payments, but also to alleviate the global stress on the balance of payments ”.
It says that ideological pressures escalate with interventionist and price control policies before the October elections.
"This creates a deadlock in IMF negotiations with official rhetoric suggesting delays, perhaps beyond the May target deadline, and a growing risk that an IMF deal will be postponed until after the October elections."
Carlos Abadi, executive director of the financial consultancy
, sees “very difficult, although not impossible, for a deal to close by May.” “My baseline scenario is no,” Abadi explained.
It would not be the end of the world if Argentina had to pay June with reserves, because those reserves could be recovered by increasing the amount of the facility to be agreed ”.
However, Abadi believes that, even if they do not reach May, they will seek to close the deal before the October elections.
“The Government has a
great incentive to close the agreement before the elections
, especially in view of the new sustainability law that gives Congress interference in the matter.
In addition, there is a non-trivial possibility that there would be a ministerial change as a result of the elections, which would impose a lack of continuity in a negotiation that would have to be well advanced by that date, ”he said.
While Jorge Piedrahita, CEO of
Gear Capital Partners
, stated: "Minister Guzmán understands the practical need to close with the Fund as soon as possible, but he is
attacked by the Kirchnerist left
, La Cámpora and in particular the Patria Institute. : the ideology imposes limits on it and makes it difficult to negotiate with the IMF. On the other hand, electoral times imply that an adjustment may not be made before the elections, which could delay an agreement ".
For the expert, the increasing probability that a new program will be postponed will have consequences.
"In terms of economic policy, it implies more controls, exchange rate intervention and other measures of a clear ideological nature," he said.
And he added: “From abroad we see a worrying ideological trend towards failed economic policies, while Cristina Kirchner and La Cámpora continue to promote an
that reminds us of the beginning of the Chavista attack against the institutions in Venezuela.
The deepening of economic policies that lead the country to bankruptcy and the onslaught of institutions produce, among other effects, capital flight, a severe drop in investment, a drop in production, etc.
The net balance is negative ”.
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