In the last three years, forecasts for the moment when the Argentine economy is going to grow again, has failed so many times that now no one is encouraged to record new projections in stone. With a low profile, analysts agree that the recession that hit the country in eight months will be extended at least until April. And in the second quarter of next year will begin, very hot, recovery. During this time the forecast has been fulfilled, it is essential that exchange stability is maintained, that interest rates are decreasing and that summer heat leads to renewal of purchasing power.
In reviewing her arrival in the G20, Christine Lagarde, IMF Director, announced the strongest forecast of what will happen in 2019 with the local economy. "We will begin to see the positive development of the program in the second quarter of 2019, in which it is April, May and June. At that time, the beginning of the change should be seen. We need to see a significant drop in inflation. "The government adheres to this vision. The team of Minister Nicholas Duovy points out that the promised green shoots will begin to appear in March.
Specialists consulted by Economically agree that there is a good chance that the collection will come in the autumn, but still there are risks around.
For Gustavo Reyes, an economist at the Mediterranean Foundation, we must not forget the fact that "today the recession is widespread than when it started. In the second quarter the fall was strong, but it was very marked by the impact of the drought. In the third quarter, the negative impact of agriculture was no longer felt, but trade and industry deepened their decline. And now the recession has spread to some of the few non-red sectors, such as banks. With the rate increase, credit expansion is beginning to fall. "
Fortunately, we have to wait until the second quarter. Reyes distinguishes between "exogenous" factors of recovery and "endogenous" factors. Among the first is the positive effect of the harvest which will retaliate in 2019 by the figures this year. "But the key is achieve endogenous change. In order to reverse the recession, it must put an end to the vicious circle of high uncertainty, low consumption, devaluation and inflation expectations. "
In this regard, Reyes noted that "the recession is beginning to do its job limiting inflation"Indicator of this is that" the basic inflation rate in September exceeded 7%, in October it is over 4% and is expected to reach 2.5% in November. The strong recession and the tranquility of the exchange rate, which was until a week ago, are two factors that will clearly play in favor and thus we will have lower inflation. This is a necessary condition for reactivation, because to the extent that inflation falls, expectations for a devaluation will begin to fall. Without this, it is difficult to keep the interest rate falling. So, wages will stop wasting and by the end of the year they could start earning a little. "
Reyes points out that this "optimistic scenario is not without risk". In particular, the economist mentions the slowdown that threatens the United States, China and the European Union. "The big blocks will have a year worse than this in 2019. But it is positive that Brazil and Chile will accelerate their growth."
For the Ferrer study, "in an immediate term, although we believe that the recessive phase of greater sharpness is left behind, we do not expect generalized dynamics from the sectors that make it possible to talk about a solid recovery. "Fausto Sporeno, director of consulting services, suggests that recovery will depend on whether the competitive exchange rate is sustainable, Brazil's agricultural performance and growth.
These factors add to the evolution of purchasing power. Guido Lorenzo, chief economist at the consulting LCG, notes that "there are signs that there may be a re-composition of wages. You already see parities that negotiate about 45%, as is the case with trade, which is the biggest. If that path is followed, there may be room for improvement between the first and second quarter. We also have to bear in mind that the income that depends on the Treasury, such as pensions, will be indexed by inflation this year, which was high. Although at macro level this is not ideal, because it generates rigidity, at least it does not allow real income to fall so much. "
The good news will come from construction and exchangeable sectors. "On the investment side, there may be some surprise in the sectors where profitability was prolonged, as was the case with construction. The ratio between cost and price per square meter in dollars generates an important attraction for investors, despite the fact that in the short term there is a reduction in demand. "Lorenzo also notes that" the first quarter of the coating will come from the export side. Not only because of a good harvest, but also because of the dynamics of manufactured products of industrial origin we have seen this year. This can cause growth of the exported volume to be about 15 or 20%. "
However, the LCG economist notes that "2019 is not without risk. On the one hand, there is political uncertainty that the elections face, which can give negative feedback, which at the same time generates fewer investments, which causes the situation to deteriorate. The second risk I see is "consistency" between monetary policy and parity policy of 40%. The growth of the monetary base of 0% is a very contractual policy, so there is a certain inconsistency Macro that you need to see how it is resolved. And the third thing would be that in 2019 there will be an outflow of capital generated by an external event or by the same political uncertainty. "
From EcoGo, Federico Furias emphasizes that the economy "will make the floor in November and will begin slowly recovering in December with re-opening of the money, slowing inflation, gradually lowering the interest rate and the harvest of wheat. "
Furiasis warns that charging will be slower in real wages and in loans. "The double zero of fiscal and monetary adjustment puts a ceiling on the floor and a floor at the interest rate. The challenge is how much the real exchange rate can be postponed by external financing, so wages will recover from inflation after 2018, in which lost from landslides. And let's see what the central bank's margin needs to lower the rate and give air to the economy without generating a new stock market that is endangering inflationary expectations. "
Even in the most optimistic scenario, it's practically impossible for 2019 to finish with red. After a fall of 2.5% in GDP, 2018 will leave a significant statistical retreat. For Reyes, next year will close with a drop of 1.5%. According to Furias, "it will be difficult to get out of the fall for the average of the year, but with an average quarterly recovery of 0.6% we could reach the fourth quarter with growth of 2 or 3% year on year."
"I'm not so pessimistic," Lorenzo says. "We see a marginally marginal fall for 2019, which implies growth between the points of activity, taking the effect of the pull."