Economists argue that agreement with the IMF should not be delayed

Photo Agustin Etchebarne
Agustín Etchebarne
General director en Libertad y Progreso

Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.

ÁMBITO FINANCIERO – Economists of different tendencies agreed that the Minister of Economy, Martín Guzmán, should not let time pass to agree with the International Monetary Fund (IMF). The reasons range from an eventual spiraling of the dollar in the coming months to the expiration of $ 2.4 billion in May with the Paris Club.

This was pointed out to Ámbito by the chief economist of the Orlando Ferreres Study, Fausto Spotorno; the economist of the Fundación Libertad y Progreso, Agustín Etchebarne; and the analyst from the Scalabrini Ortiz Study Center, Nicolás Pertierra.

Spotorno expressed concern about a possible delay in the agreement and the lack of what he called a “sustainable program” by the government to attack the problems of the economy. According to recent statements by Minister Guzmán, the agreement with the IMF would only be in March or April.

“If the agreement is delayed a long time and we continue without a sustainable economic program, there are not many reserves and it is a danger if the dollar begins to move again,” said the economist. Spotorno commented that the Government managed to impose a certain calm on the exchange market thanks to “quite logical financial engineering”, but that it is not in a position to say “that there are no problems”.

According to his reasoning, delaying an understanding with the international financial body has two risks. “One is to run the risk that one day the dollar will start to rise and will not be able to stop it. Argentina has a good chance of unexpected problems. Afterwards, the same thing that happened with the negotiation of the private debt can happen, that is negotiated so much that later the benefits are not seen ”, he explained.

For his part, Pertierra emphasized the need to reach May 2021, having already closed a program with the organization led by Kristalina Georgieva. Next May Argentina will have to attend a maturity with the Paris Club for US $ 2.4 billion.

“In terms of the negotiation period, the only thing that we see as a priority, because it conditions time, is the payment with the Paris Club, which is in May next year,” explained the CESO economist. If a program with the IMF is not closed, then that maturity would have to be paid in cash or default with the group of European governments that have lent the country money in the past. The expiration of May 2021 is the result of the negotiation that Axel Kicillof had made when he was Minister of Economy. But Pertierra clarified that “in terms of confidence, the situation in Argentina would not change depending on whether there was an agreement with the Fund during December.” “This positive effect of improvements in expectations, which some part of the Government lets slide depending on the fact that there is an agreement, is not very great. It can last very little. That is why I would not rush so much for that reason, but for the Paris Club, “he said.

For economists, meanwhile, there is also the perception that the distance between Guzmán’s proposal and what the agency’s officials want is still wide. Etchebarne assured that if the Minister of Economy raises a horizon of March or April, “it is because the agreement is not close”, so he considered that “he is opening the umbrella so that people do not have a disappointment if it does not come out quickly” and he estimated that it will not be there before March or April of next year. Explaining the reasons for the delay, Etchebarne said that “there are serious inconsistencies between what the Budget says, what the IMF says, and Guzmán’s statements.” “The IMF says that it should not issue more than 1.5% of GDP, but the deficit that is projected in the 2021 Budget of 4.5% in the primary plus interest is 6% of GDP and the question that arises it’s where the difference is going to come from ”.