The global context and the crisis itself have set limits on the dollar factory

The past year saw a recovery in most areas of the economy, and it was stronger than many expected. Exports were no exception, an item that deserves special attention for the New Year, as it plays a major role in several dimensions. And the “real dollar factory” will have to pay in the coming years to repay the renegotiated debt – with private creditors – and to renegotiate with the International Monetary Fund and the Paris Club. In addition, the trade surplus – which we hope will continue – will finance the import of inputs crucial to the expansion of production, and with it economic growth, employment and incomes of the population. Finally, the hardness of stocks will be inversely proportional to the availability of foreign exchange in the central bank. So, where is Argentina heading?

according to The latest official foreign trade figures, the interview November, exports for the first eleven months of the year amounted to $71,320 million, at least 38.9% above 2020, the year of great confinement due to the pandemic and the paralysis of global movement of products and services.

Meanwhile, imports reached 56,968 million, a year-on-year increase of 48.2%, higher than overseas sales. This is explained by the fact that the revitalization of the economy led, as usual, to an increase in purchases abroad, both of consumer goods and inputs and parts of production, especially industrial production.

From the above, it shows a positive balance of the country of $14352 million between January and November which will certainly extend when you know the December data. Dobubble insight?

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According to official sources, the national economy will free itself from all obstacles to foreign exchange, the so-called “stocks”, and will free up its investment and production potentials to a greater extent if the state exports at least 90 thousand million dollars a year. . The number left in 2021 is still far from that threshold and much more than promised Alberto Fernandez To double overseas sales. spoiler: The boom has not started yet.

According to the report of the consultant and analyst Marcelo Elizondo, Director DNI . Consultants President of the Argentine branch of International Association for Performance Improvement (ISPI), last month’s data will make 2021 exports exceed $76 billion and imports will exceed $62 billion. In this way, the surplus is approximately 14 thousand million dollars.

When it comes to 40% export growth, it must be borne in mind that the basis of comparison is very low. Thus, last year’s exports were lower than those of 2010, 2011, 2012 and 2013.

In addition, last year’s jump was the result of a combination of external factors such as the rise in raw material prices – 70% of national exports correspond to the agricultural complex, the highest in 40 years – the recovery of international trade to a rhythm of 10% by volumes, and the expansionary monetary policy of the States The United States, which led to inflation in prices of all goods listed in dollars, and the impulse that assumes a strong recovery of the economies of the main customers Argentina (Brazil, China, India, the United States and the European Union).

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According to Elizondo’s work, it is worth highlighting another factor that helped promote the positive trade balance: the recovery of world trade in goods was much faster than the recovery of services, an element, the latter of which is usually in deficit for Argentina, as is especially verified in the case of tourism .

According to the work, although the “nominal result of exports of goods from Argentina in 2021 in dollars is very satisfactory,” it is still about 5 billion less than the record for 2011.

Indeed, this good performance must be understood within a global context of recovery. Thus, according to World Bank data, Argentine exports represented 0.34% of the world total last year, down from 0.45% in 2010.

According to Elizondo, the outside trends that worked in favor of last year will be completely or partially gone this year.

In this context, he cites the World Trade Organization (WTO) to less than halve the expansion of international trade after a 10% jump in 2021.

Second, the growth of Brazil – a major buyer of Argentine industrial products – will decline from an estimated 4.5% last year to just 0.36% in the current, according to Focus report prepared by the central bank of that country.

Third, Elizondo says, “it is very important to adjust monetary policy in the United States” with the expected rise in interest rates, “and this could potentially weaken international prices — nearly 80% of international trade is done in dollars.”

Fourth, it calls for conservative expectations when considering domestic factors such as the gap between parallel and official exchange rates – expectations of currency devaluation, discouragement of export liquidation and acceleration of imports – persistence of cutbacks, high production taxes, macroeconomic instability and overregulation of productive activity.

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Finally, it lists “hypothetical global risks such as unexpected behavior of the pandemic and potential geopolitical developments,” among others.

Because of all of the above, the specialist temporarily concludes that Argentine exports will not grow this year compared to 2021, while imports are close to their average value in the past ten years. Thus, it is possible to expect a surplus in trade in goods between 8000 and 9000 million dollars, a figure also conditioned by what the balance of services shows.

To free itself from its traps and make room for the development process financed by the commercial “dollar machine,” Argentina needs much more than extraordinary external circumstances. Macroeconomic arrangement and continuous improvement of outlook and investment are the inevitable goals of the country.

Aileen Morales

"Beer nerd. Food fanatic. Alcohol scholar. Tv practitioner. Writer. Troublemaker. Falls down a lot."

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