"A devaluation is inevitable," says Carlos Melconian in the latest report from the consultancy M&S.
For the economist, after the latest estimate of the impact of the drought -Argentina will lack US$ 20,000 million-
the Government does not have another chance
.
"We will have to see how they do it, what mechanism they find, but the price of the dollar for exporters has to be different and for importers, too," says Melconian.
In addition, he believes that Massa will not only devalue the countryside with a new "soybean dollar 3", but will extend that benefit to other export sectors.
What is new is that he believes that
this more expensive dollar will also be for at least part of the imports
.
"The climatic catastrophe that collapsed the harvest will sink exports, reduce revenue, contract activity and put more pressure on inflation. This will make this complicated 2023 very complicated," the report confirms.
"The exchange rate impact is lethal. In any country, such an export shock would lead to a loss of reserves, external debt and inevitably to a rise in the exchange rate. Here there are few BCRA own reserves, there is no financing and the Government will try to avoid until the last
minute an exchange rate jump
. But there is no stocks, nor SIRA, nor 'caps' around the world, nor mini-devaluations, nor savings in energy imports that can compensate for such a collapse”.
The M&S approach is very similar to the one analyzed by the economic team technicians with the Monetary Fund in Washington.
The team led by Luis Cubeddu would endorse a "temporary and orderly" exchange rate unfolding.
Translation:
a devaluation for a specific group of exporters
(field, automotive, technology, oil) with a dollar between 20% and 30% higher than the current one.
The Fund would also require that there be importers who have to pay that dollar for there to be genuine demand to supply the market.
On the night of October 11, 1812, Juan Jose Castelli, the orator from Mayo (paradoxically died of tongue cancer) wrote his famous phrase, repeated so many times: "If you see the future, tell it not to come." Castelli
's
anguish fits these times:
-The loss of income from withholdings exceeds one point of GDP, more than 1 trillion pesos.
-The drought hits squarely in the two products that pay the highest withholdings, soybeans and corn.
-Last year US$ 10,000 million were raised.
This year about US$ 6,000 million would be raised.
-The activity, as a whole, can fall 3%.
-The greater monetary expansion puts in doubt that the monthly inflation stabilizes around 6%.
The report concludes that "all this leads inexorably to a recession with a fall in GDP."
Inflation could go to 7%, which would be 125% per year, or to 8% per month, which is equivalent to 150% per year.
The Fund and the opposition
Faced with this dark panorama, the Fund decided to contact some opposition economists, who questioned its flexibility with the current government.
One of the opposition economic references told
Clarín
the scene : "They are not going to ask us for a savage adjustment after giving this government everything it asks for," the Argentines stated.
The Fund returned the ball to them: "If we are flexible, it is so that the bomb does not explode, because otherwise it will be worse for everyone, also for those who govern since 2024."
The alliance between Sergio Massa and Cristina Kirchner continues, beyond the numbers.
An Axel Kicillof official told this newspaper: "Our Plan A is Cristina President. Our Plan B is Massa President. There is no Plan C or D."
-
Does Alberto really want to go for re-election?
Clarín
asked
a minister.
"It depends," he replied.
-What does it depend on?
-Depends on the day.
Last week Kicillof, Cristina and Massa met in La Plata.
His biggest coincidence was to continue cornering Alberto so that he renounces his re-election plan.
Sergio, on his side, continues to gain support.
Larroque said "I always want him on my team" and Ferraresi was brutal in stating that "Sergio took office one day before we left by helicopter."
A national official aligned with Cristina commented: ”You cannot ask Sergio for magic.
The worst drought in more than 60 years came, the avian flu, the banks in the world fell.
That cannot be controlled.
Sergio is pissed, ”he concluded.
"Massa's departure from the ministry makes no sense for him or for us. Who do we put? And he, where is he going?"
Devaluation, as can be seen, is the least of our problems.
look too
Drought: Santa Fe is the most affected province in the country and will have losses of USD 4,290 million
Officialism and opposition, with the same almanac and opposite dilemmas
