FIDE considered that “to the extent that the definitions on the refinancing of the debt with the IMF lengthen, the uncertainty is accentuated and the economic activity could be affected”.
The document highlighted that “the maturity calendar puts time to play against since during January and February there are debt maturities that can be met with BCRA reserves but not the commitments that begin in March and accumulate for all 2022 “.
Later, the document highlights that “in January, interest must be paid with private creditors for 693 million dollars that expire today and capital to the IMF for 715 million dollars that operates on January 28. In February there will be payments to the IMF and other international organizations for 380 million dollars.
Finally, in March maturities of almost 2,900 million dollars appear to the IMF and 2,100 million dollars to the Paris Club. Throughout the year, $ 18.9 billion will have to be paid to the IMF. “
FIDE estimated that “The Argentine proposal indicates a gradual fiscal consolidation, a less expansive monetary policy (reduction of BCRA financing to the Treasury and positive real interest rates), a multi-causal approach to the inflationary problem (which includes price-wage agreements) and an administration of the external sector with validity of the exchange regulations and commercial surplus to accumulate reserves “.
For the foundation “the broad lines look acceptable for all members of the ruling coalition, since they do not imply leaving aside any historical flag on the road. The new agreement will not have a devaluation prerequisite, nor will there be any labor reform implementation. or on retirements or abrupt fiscal adjustment that endanger the recovery. The interest seems to be more placed on the composition of financing with the market versus issuance. “
However, FIDE warns “about the fine print of the agreement. The final form in which the current payment structure will be articulated, the monitoring of quantitative goals and, in the case of non-compliance, the deadlines to settle it, must be closely followed. “.
Regarding public sector financing, FIDE highlighted that despite the fact that in the last quarter, the loan ratio improved, the financing of the deficit was mainly supported by the BCRA. The fiscal deficit was covered by 65% with the BCRA and 35% with the market, even though the fiscal goal will be over-met, a fact that ended up reducing the weight of monetary assistance from the BCRA to the Treasury. “
FIDE predicted that “looking to 2022, it will be key to be able to deepen the performance of debt placements during the last months of 2021. Especially, considering the form that the fiscal deficit will have throughout the year that begins. The Mobility Law Retirement indicates that current spending is indexed to the rate of inflation of 6 months ago. If inflation decreases, this will make financial needs look more bulky towards the first half of 2022 and less for the second half (pensions should increase in real terms in the first six months of the year) “.