The currency crisis hits hard on the activity, the balance and domestic consumption

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The currency crisis hits hard on the activity, the balance and domestic consumption







© CEDOC



The currency crisis, with a gap between exchange rate official and parallel that climbed in the last hours to a level of 140 percent is aggravating the serious distortions who had already been suffering from economy argentina from the previous management and the pandemic, but the lack of a horizon is directly affecting the possibilities of improving the level of activity for next year.

Both at the level of the economic cabinet and various private consultants admit that to the extent that the situation of serious instability continues, the less likely it will be to achieve a slightly more sustained economic recovery in the coming year.

The macro data released by the Indec in the last hours they are a faithful reflection of this situation.

Regarding the balance of trade, in September the surplus fell notably by 1,160 million compared to the same month last year and also with respect to July 2020, which registered a positive result of 1,400 million dollars.

The instability of the dollar caused a sharp drop in the trade surplus

The exports in the past month cyesterday they were 18 percent and imports grew by 3.1%, which shows that Due to the great exchange rate instability, exporters reduce their foreign sales and importers are advancing their purchases abroad, a trend that is accentuated in October.

On the side of the economic activity, In August, the rhythm that had begun to show at the beginning of June deflated again.

There, too, the Indec figures are overwhelming. In the eighth month of the year, economic activity fell 11.6 percent year-on-year, with an accumulated collapse in the year of 12.5%.

But the data that worries is that the “new green shoots” that had appeared from June began to wither.

For example, in August the economy showed an improvement of 1.1 percent compared to July.

Blue dollar record: “You can’t avoid devaluation”

But in July compared to June, economic activity showed an improvement of 1.7 percent and in turn in that month compared to May a recovery, due to greater normalization in the midst of the pandemic, of 7.6 and further still of the 9% improvement compared to April, where there was a absolute quarantine.

On the side of the industry It is also clear the strong hit which is giving the manufacturing sector the return of currency virulence in the country.

According to INDEC data, based on the latest statistics released, the Industry fell 8.7 percent year-on-year in August, compared to 8.4 percent in July and 5.7% in June.

Another figure that is worth taking into account is related to the activity of the building, what in August and following the INDEC statistics, had a year-on-year collapse of 32.1%, while in July the decline had been somewhat more attenuated at 30% and 30.7% in June.

In where a certain change of panorama could be verified is in el agro, with a production that fell 2.2% in August, while in July the collapse was 4.7% and in June 10.1%.

Although many economists have differences of criteria among themselves, essentially in some cases of a dogmatic nature, the central point is that the exchange rate overflow has caused a notable drop in the price benchmark.

“What happens is that If there are no reference prices, you begin to see serious problems for foreign trade, for domestic trade, and there the sales stop begins again, because nobody wants to get rid of merchandise that they don’t know later if they will be able to replace it. commented the analyst Christian Buteler.

In fact, the car and motorcycle dealership sector warned that in the last two weeks, many agencies stopped selling zero kilometer units until there is greater exchange rate stability that implies having a clearer picture of the values ​​of the units .

In turn, in the month of September, according to the consulting firm Focus Market, consumption continued to fall at a rate of more than 5 percent and estimates that the situation of instability and rising inflation further distorts the prospects for a recovery in public spending.

LR

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