The Argentine economy still does not have enough dollars to finance imports, the payment of debt, interest, dividends, savings of Argentines and the sale of tickets abroad. In the last 12 months, the balance of the foreign exchange balance is negative in US$ 401 million. Forecast reserved for reserves, the external restriction is still present in our economy.
Argentine reserves are increasingly low, the devaluation of the yuan took away the weight of Chinese credit in reserves, which in net terms are negative by more than US$ 3,000 million.
In the month of May we need the Central Bank to begin to increase purchases of dollars, in this way it would raise reserves and could contain the rise in alternative dollars. The soybean and corn campaign continues at a good pace, the arrival of trucks at the port is increasing and we are in a scenario of growing settlements.
The field is quite reluctant to sell, the high economic and political volatility fills the scenario with uncertainty. Out of 41.2 million tons to be harvested, 5.2 million tons are sold at a price, very little for what we are used to. Nearly 20 million tons should be sold by the month of July, there is a lot of money ahead. In corn, out of a harvest of 49.2 million tons, 15.9 million tons have been sold at a price. By the month of July, some 30 million tons should be sold. In summary, within 90 days dollars should enter for the equivalent of some 15 million tons of soybeans and corn, this would imply some US$13.5 billion.
The problem is not the dollars that enter, in fact so far this year the income of dollars from the export of cereals and oilseeds stood at US$ 11,098 million, when in 2019 for the same period it was US$ 6,104 millions. God is a Peronist, when they come to power the price of soy reaches impressive values.
In the current situation, we have a severe problem in the United States, since corn and soybeans are being planted with great difficulty, everything suggests that nothing will be easy. Therefore, firm prices are discounted for the coming months.
The collection for the month of April was very good, $1,345,595 million entered, grew by 64.0% annually, and $100,000 million more were collected than in the month of March. We believe that the fiscal result for April should be better than expected.
For the month of May, June and July, the income of money to the treasury will be very important, profits from a legal person plus advances, profits from a human person plus advances, personal assets, and yapa in July you have to pay the Christmas bonus. Conclusion, there are not enough pesos in the economy to face these maturities. Some taxpayers will have to sell merchandise in stock, others dissave, take credit or sell dollars, no one has enough cash to pay off this mountain of maturities.
On Thursday, May 12, we will know the inflation data for the month of April, nobody knows for sure how the result will come about, but we could say that a range of possibilities opens up between an inflation of around 5.5% and 6.5 % monthly.
A rise in inflation of this magnitude would leave us with annualized inflation of around 57% per year, which would force the Central Bank to call a meeting to raise the rate by a nominal 1%, to levels of 48.0% per year. , which should generate a rise in the fixed term to levels of 47.0% per year.
The best tool for saving is the fixed term adjusted for inflation, since as of May 13, it will begin to accrue the inflation rate for the month of April. In the last year, the fixed term adjusted for inflation showed a return of more than 50% per year, and over the next few months it could reach a return of 75% per year by the end of the year.
The inflationary dynamic feeds back every month in an economy that does not receive investment, lacks competitiveness and productivity. The rise in costs with an economy that does not produce more goods causes prices to adjust upwards, all this without counting the enormous monetary issue that we carry from the second half of 2022.
conclusion
- The key day is Thursday, May 12, when the inflation for the month of April will be known, an increase to levels of 57% per year, will invite a rate hike that will change the investment map. It would also have a political impact since there are rumors of a change of minister (a change that never materializes).
- The dollar will continue to be under great pressure due to the lack of cash, the State continues to finance itself in the internal market (it generates illiquidity), and the taxes due will force it to sell stock of merchandise, dissave in pesos or sell dollars in the market.
- The world is becoming more complex: rate hikes in the United States, Europe with severe economic problems stemming from the Russian-Ukrainian war, a lack of merchandise on a global scale, and China closed to the world due to coronavirus.
- Once again, financial problems, cuts in the supply chain and lack of merchandise are combined, these cocktails of problems do nothing but take us down the path of higher world inflation, therefore, the rise in rates that we see in the United States will not be the last, and new problems will come ahead.
- The year 2022 looks negative, but the problem is that it will not leave positive drag for the year 2023, where the growth engines are still missing. It is necessary to work on business strategies that contemplate that there is no horizon ahead of improvement in real wages, more investments, less inflation and a stable dollar.
- Unfortunately, we must work thinking that in 2022 the GDP would grow 2.6%, with consumption increasing at a rate of 5.8%. For the year 2023 the GDP would grow 0.5%, with a consumption that in the best scenario will be stable. A consumer market that will shrink, and companies will have to offer a wider range of products, especially adjusting for price and quality downwards.
- Defensive strategies with savings are recommended, betting on shares abroad does not look positive, the rate began to rule on the horizon, and when this happens, liquidity rules. The dollar for now and only for now stable, by the end of the year exceeding $300. More information in private reports.
Economic, financial and business analyst, lecturer, researcher and private consultant.