Days before the presidential elections there was a escalation of parallel dollar quotes and the Indec confirmed that September inflation was elevated, 12.7% monthlythe highest since 1991, before convertibility. How does the economy reach the presidential elections? Let’s see the main aspects:


Between last Monday and Tuesday, the blue one exceeded $1000 and although it moderated its rise, it climbed 11% in just one week, and closed on Friday at $980. Meanwhile, the MEP dollar increased 6% in the last seven days and ended at $870.43.

Parallel contributions are rising for several reasons, such as the dollarization of the portfolios of large businessmen in the face of electoral uncertainty, the acceleration of inflation, and the agreement with the IMF that is expected to be renegotiated.

During the exchange rate run, Milei’s statements that the peso is an “excrement” added more fuel to the fire. There were also cross statements between the main candidates accusing each other of responsibility for the increase in the greenback. Even the president of the nation, Alberto Fernández, denounced the presidential candidate of La Libertad Avanza for “instilling public fear”, an action that according to what was revealed in the media was a decision not consulted with Massa that angered the candidate minister (the internal conflicts continue in the government coalition).

It is necessary to highlight the structural factor of the few reserves of the Central Bank which means a weakness to defend the value of the local currency. According to the consulting firm Ecolatina, the Net Reserves (considering the SDR but excluding the rest of the BCRA’s liabilities) were reduced by more than US$ 400 million in the week and remain at historic lows: They are negative by almost US$6.5 billion. The Government is responsible for the loss of dollars for wasting the 2020-2022 trade surplus on payments of public and private debt of companies, remission of profits from large firms, among other things.

The “markets” anticipate a devaluation. Future dollar operations (contracts that are agreed upon, settled in pesos and are tied to the evolution of the official exchange rate) that are agreed for December rose to $900 at the end of the week, increased from 48% to 112%, according to Ecolatina. which anticipates a jump in the official dollar.

The Government extended the soy dollar, but agricultural settlements collapsed and averaged US$85 million, 70% below the September average, according to Ecolatina. It is little surprise that agricultural employers are speculating on a devaluation that will improve their income.

Due to the weakness of the reserves, a new devaluation is projected to be carried out by a new government, whoever wins the elections (Milei, Bullrich o Massa). Although they accuse each other in the media They agree to destroy the salary.


The post-election devaluation overheated prices since there is a feedback between the increase in the dollar and inflation (although Milei denies it). Last Thursday, Indec confirmed high inflation, which incorporated the full effect of the increase in the official exchange rate in August and has already accumulated 103.2% in the first nine months of the year. Food prices rose to 14.3% in September with increases of up to 26% as was the case of rice, and in one year there were products that exceeded the general level (138.3%) such as potatoes (334%), roasted meats (156%), or oranges (339%), according to data from the Index The barbecue promised by the ruling party did not return to home tables and became a luxury.

Core inflation, which does not consider regulated or seasonal, rose to 13.4%, reflecting a greater inflationary inertia. Meanwhile, the exchange rate run in recent weeks also pushes prices up, which anticipates that It will remain at a double-digit floor in the next month. The Central Bank published the Market Expectations Survey (REM) on Thursday and calculated inflation for this year of 180.7%. For its part, the IMF indicated in the report of the Department of the Western Hemisphere that was presented at the organization’s annual meeting in Morocco that inflation is expected to be 135% in 2023, although this “will depend on the evolution of the exchange rate.” and the degree of tightening of policies”. The Fund anticipates that inflation may be higher if there is devaluation and washes its hands of its policies that pushed the economy to the current situation.

Inflation destroys the purchasing power of wages. According to the latest data published by Indec on the July Salary Index (without the impact of the devaluation), So far this year, purchasing power shows a 6% drop in the informal sector and a recovery for registered workers.

So far in Alberto Fernández’s government, the collapse of the purchasing power of the informal sector is 24%. This means that the most vulnerable sector is the one that suffers the most from inflation.

But in relation to 2015, all sectors lose by a landslide. In the registered sector, the drop in purchasing power is 19%, a little more pronounced in the public sector. And in the unregistered sector compared to 2016 (when the series began to be published), the decline is much greater, 42%.

This deterioration in the purchasing power of salaries is reflected in the 40.1% poor people and it is the basis of anger with those who governed at least in the last decade.

Economic activity

Another relevant fact about the situation is economic activity and it is slowing down. After growing around 10% in 2021 and 5% in 2022, activity registers a drop of 1.8% in the accumulated of the year until the month of July (latest data available from Indec). And it will end the year even lower.

In the September survey, REM analysts estimated a level of real Gross Domestic Product (GDP) of -2.8% for 2023, while the IMF indicated in its report that “real GDP is expected to contract by 2.8%.” .5% in 2023 due to the severe drought.”

Once again, the Fund hides that this slowdown is related to the restrictions established by the agreement, beyond the fact that it was also affected by the drought. The Central Bank increased interest rates from 118% to 133% last week, one of the IMF’s classic recipes, which drives recessionary trends because it makes productive and consumer credit more expensive, while benefiting the banks that earn from the higher rates they receive for the interest they charge for Leliq.

This recessive trend installed in the economy for months gains new momentum with the devaluation, the increase in interest rates and the adjustment of public spending, which continues at the request of the IMF. According to the latest report from the Congressional Budget Office (CPO), primary spending fell 5.5% in real terms in the first nine months of the year, and included cuts in retirements and pensions, family allowances, social programs, and subsidies. to energy, among others. Not everything fits, The amount allocated to debt interest increased 11.5% in real terms in the same period, “mainly explained by higher interest payments on foreign loans, in a context of rising international interest rates. Payments to the IMF accumulated $514,921 million in the year,” adds the OPC document. For the Frente de Todos Government there are expenses and “expenses.”


The debt does not stop increasing despite the restructurings and agreements. According to data from the Ministry of Economy, in 2019, the gross debt stock of the National State was US$323 billion. In the second quarter of 2023, that debt increased to US$403 billion. That is, it rose 25%. In the Frente de Todos government, the debt grows, mainly, due to the issuance of debt in pesos, which, although it may be more controllable than debt in dollars, is another mortgage in favor of financial capital.

Between 2024 and 2032, the maturities of capital and interest on sovereign debt that Argentina will have with international credit organizations and private creditors (without considering intra-public sector debt) are close to the US$ 18,000 million dollars on annual average. A sum that almost doubles the trade surplus of 2020-2022 (without the effect of the 2023 drought). For this reason, the main candidates agree on deepening the plundering of our natural common goods such as lithium, gas, and water with the promise that those dollars will be used to pay the debt.

The economic situation is critical. Are needed measures of another kind to rebuild the country’s reserves and attack the causes of inflation such as nationalization of foreign trade under workers’ administration, nationalize the banking system and the creation of a single state bank, and the mobilization for sovereign debt ignorance. These measures are part of the proposals of Myriam Bregman, the presidential candidate of the Left Unity Front.

It is necessary to reorganize the economy on other bases, putting first the needs of the social majority and not the thirst for profits of a few.


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