Analytica outlined the possible paths that Argentina can travel next year, depending on the external context and the relationship with the IMF
</p><div>
<p>Post-STEP uncertainty hit Argentina's economy hard. In the last month the dollar rose more than 20%, country risk rose 1200 basis points, bonds collapsed, inflation returned to 4% monthly and it is not known if the International Monetary Fund (IMF) will approve the new disbursement of the agreement before the elections.
In the midst of this instability, the Analytica consultancy proposed three scenarios that the Argentine economy can go through in 2020.
Base scenario
Analytica assumes that a "moderate" gap is maintained between the different parallel exchange rates, the IMF is satisfied with a balance in the primary result, so it grants the committed disbursements and refinances the debt capital in 2022-2023, without The need for a voluntary exchange. The economy would fall 2.5% in 2020 with a balanced exchange market and a tough monetary policy.
The three scenarios proposed by Analytica, according to external conditions and the relationship with the IMF.
In the report it is estimated that in this case retail inflation would be 49% in its measurement December 2020 vs. December 2019. Core inflation would be around 50%. This price dynamic is consistent with nominal wages moving at 41%, regulated prices at 44% and a nominal exchange rate at 44%.
The real exchange rate would appreciate 5%, in line with a balanced exchange market that is covered by the IMF's scheduled disbursements, with no debt swap in dollars, in a context of "slight capital control" that limits demand of external assets for hoarding.
As for wages, the fall in wages in the first half of 2020 would be very strong, Analytica estimates, which warns that if they were adjusted for inflation throughout the next year they would register a 5% deterioration.
Positive scenario
Analytica outlines a scenario similar to the 'base', but with better external conditions. It includes additional funds from the IMF or an income from capital resulting from an eventual exchange, which as a whole could imply an improvement of US $ 6000 million in the capital account of the exchange balance sheet with respect to the 'base' scenario. "This allows a real appreciation of 12% and salaries that fall 3%, improving with respect to the previous scenario," he said.
Inflation would be around 43%, mainly because the improvement in nominal wages is offset by the deceleration of the nominal exchange rate. In addition, the current account surplus (lower with respect to the base scenario) and primary (higher with respect to the base scenario) are maintained.
"In both scenarios, the fundamentals (real exchange rate, rates, current amount and primary surplus) remain solid and healthy. That is the main asset that would be inherited from the Macri management. Instead, the activity starts from the second basement and with problems to recompose income due to the contractual structure of wages in a context of high real interest rates, "the report highlights.
Negative scenario
Argentina would enter this situation, much more critical, if the agreement with the IMF is broken, says Analytica. In this case, a forced debt swap and a dollar harder than the current one would be entered. "To the consequent devaluation of the parallel exchange rate we must add a more lax economic policy," the report estimated
While the absence of external credit implies serious problems for aggregate demand, economic policy would act countercyclically, which would result in higher inflation and a more acute recession due to the patrimonial effect on aggregate demand, induced by "default."
There would be a definitive break in the payment chain, affecting the sustainability of the firms and therefore the level of employment. The fall in GDP would be greater than 4%.
"The next management can capitalize on the inherited good fundamentals and should concentrate on fixing what is still not working. Namely, the external sector (here we notice a clear dilemma between the level of reserves and the exchange gap), the debt path and the inflation. Later, focus on growing. 2020 begins to look inexorably lost, "he concluded.
I knew the value of the dollar in Dollar Today and followed the price and behavior minute by minute. <strong>CLICK HERE</strong>
Find out the latest on digital economy, startups, fintech, corporate innovation and blockchain. <strong>CLICK HERE</strong>
</div></pre>
Source link
https://www.iprofesional.com/economia/299862-ingreso-plan-precio-Elecciones-dolar-FMI-tres-escenarios-para-Argentina-en-2020-segun-analistas
