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Informe Mensual Económico Financiero N° 346 – Diciembre de 2018

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exports and the very significant contribution of property rents (the effect of higher

interest rates on financial placements of the ANSeS).

The doubts of the economic agents in fiscal matters are concentrated in two

points : i) the feasibility of sustaining the primary deficit 0 agreed with the IMF in

2019 with the fiscal inertia that left 2018 (increases of retirements and of AUH

greater than 30%), and ii) the feasibility of the primary surplus of 1.2% (and a

total deficit of 3.2%) foreseen for 2020 and that the same can calm down the

expectations and allow to renew the maturity of the public debt.

In November the Central Bank completed the process of dismantling the LEBAC

stock, part was absorbed by fixed term deposits (they grew 18% in October and

9.8% in November), which in turn explains the increase in the stock of Leliq.

The exchange rate fluctuated within the band agreed with the IMF, close to the

lower limit at the beginning and taking off at the end of the month. The nominal

exchange rate depreciated 5% and the real 2%.

For 2019, uncertainty is the main enemy of the recovery. It not only limits private

investment but also slows down consumption, given the fear of economic agents

of committing future income in a context of eventual increase of unemployment

(and this affects the purchase of durable goods). The increase in consumption

will be vegetative, it will concentrate on goods with lower income elasticity (more

essential) and motivated by needs for renewal or replacement. Exports

(supported by the recovery of Brazil), although expected to grow, do not have

traction power at the aggregate level.