Sergio Massa, will announce tomorrow afternoon his Deputy Minister of Economy, the man who will handle day-to-day coordination of macroeconomic policy. But also, after he presented measures in his first conference, but not their impact on the numbers, details of the official calculations began to be known today: the fiscal adjustment for the removal of subsidies -and lower consumption- would be $500,000 million in a full year at present values.
Also, at the Palacio de Hacienda they estimated that the annual deviation from the primary deficit goal with the International Monetary Fund (IMF) is today 0.7% (3.2% of GDP with a target of 2.5%), as specified. Private consultants who closely follow the fiscal issue assure that this deviation is, at least, one point of GDP. This is something that Massa will discuss with the Fund in the last week of August on a trip to the US, France and Qatar. There, Massa will have his first face to face with the IMF. Yesterday, in Economy, they spoke of “creative accounting” at the time of closing the numbers of the first quarter approved by the board and calculated by Martín Guzmán’s team.
On the fifth floor of Economy, they denied that differential exchange rates will be established or that restrictions on the “savings” or “card” dollar may be increased. There will be no changes in the trap.
In relation to energy subsidies, in Economy they refused to give even more details about average increases for those who did not request subsidies or for those who, despite registering in the segmentation register, consume above the 400kw limit. On Tuesday, notifications would begin to arrive to customers with more information about the impact of the measure announced by Massa. The Secretary of Energy, Darío Martínez, would continue in his position until Argentina Oil & Gas next week, they let it be known in the Palacio de Hacienda, although this official decided to resign.
In addition, the Minister of Economy has already had his first contact with the field, according to official sources, who clarified that there will be no differentiated exchange rates, something that they expected in the agricultural sector, especially after the minister announced yesterday that he will obtain in 60 days an export advance of US$5 billion to add to international reserves. Today, the Central Bank (BCRA) approved the issuance of a bill in dollars “aimed at stimulating the entry of external funds for pre-financing large exporters.” In addition, it enabled access to dollar-linked sight accounts for exporters who anticipate settlement in more than thirty days with respect to the term determined for each sector.
According to sources who participated this morning in the first meeting of Massa’s team and others who work at the BCRA, after the meeting with the Liaison Table – which the Secretary of Agriculture, Juan José Bahilo, should coordinate, according to what they affirmed – there could be news to get producers to accelerate their grain sales. Massa called the president of the Rural Society, Nicolás Pino, today, they told the Palacio de Hacienda.
Sources in the Ministry of Economy, considered that a new exchange rate to the countryside would generate more instability “unnecessarily” in a scheme that today they consider “very finite”. The BCRA lost another US$150 million today.
Officials who were this morning at the meeting of the Massista economic cabinet affirmed that the minister communicated to the Secretary of the Treasury, Raúl Rigo, the prohibition of having transitory advances. In addition, they analyzed the operations deployed and the summons to companies that have incurred in “a fraudulent modality” of imports. “He asked for efficient management, speed, austerity and dialogue with the sectors”, they indicated. According to what they said, each official was asked for a list of five emergencies and ten priorities in each of the areas.
“Tomorrow afternoon he will announce it,” they said about the deputy minister. Throughout the day the name of an important economist with good aim sounded in the Survey of Market Expectations (REM) of the BCRA. Other possible appointments that seemed to be confirmed today were those of Tomás Canosa, in the Pyme Undersecretary and that of Priscila Makari, in Industry, a key name at the time of the negotiation with the companies for import permits (today the notices had already been sent to the 722 companies that were denounced for “irregularities”). Until today, and “for now”, Sergio Chodos was still in charge of relations with the Fund.
Official sources confirmed that Massa met with economists this morning before the meeting with his team, but they did not reveal their names. Carlos Melconian, whom he saw last weekend, was not there.
In the Palacio de Hacienda they believe that the inflation data for July and August “are going to be very hard.” With a look close to that of Guzmán, who saw inflation as a multi-causal problem, the current administration says that the problem must be solved “in its entirety.” However, the “Israeli case” is cited as an example of a socially constructed commitment, a process that takes time, but with a fundamental focus on the fiscal deficit. “I have absolute freedom”, they say that Massa usually says about the chosen formula.
“Inflation is going to be a shock for the Government,” they say about the July data, which will be released on the 11th of this month. August will also be bad in a framework in which activity begins to plateau.