It is the chronicle of a debacle foretold. Argentines know that the closing of 2023, in addition to the election of the president for the next four years, includes the economic debacle. One way or another, inflation will skyrocket to even more stratospheric levels and the crisis will gain in virulence. One of the battles today is to see who bears this debacle: the current Peronist government or the incoming one.
Will it happen before or after December 10? Sergio Massa, the Minister of Economy who is the candidate for president, has massively reduced taxes in recent weeks and created a subsidy for informal workers, those of the wider world who earn “black money.” But the debacle has already begun in slow motion, and it affects Argentines in many ways. One of them is medicine.
“If it is not solved next week there will be serious consequences,” Oscar Mendiz, director of the Favaloro Foundation, the leading cardiology center in the country, wrote on social media these days. The draconian restrictions on imports in a country with negative reserves in the Central Bank are preventing the entry of medical supplies, including contrast media to perform catheterizations or angioplasties.
There is also a lack of stents and filters for dialysis. An important advisor to the Minister of Health, Carla Vizzotti, negotiated days ago until dawn within the government itself to allow a medicinal shipment to enter the country. Some doctors are starting to charge a co-pay because the fees they charge for private health insurance have become ridiculously low in a country that had 12.4 percent inflation in August. Yes, 12.4 in just thirty days.
The import tap is opened and closed by Massa. The cut to imports is also noticeable in matters infinitely less important than that of medical supplies, but which are still symbolic: “Tea Connection” is a house specialized in teas, with several stores in much of Argentina. Of the 40 varieties they usually offer, last weekend there were stores where they only had five or six: “They are not allowing tea to be imported.”
The next president will be the ultra-liberal Javier Milei, the social-liberal Patricia Bullrich or the Peronist Massa. When speaking in confidence with advisors from all three, the panorama is dantesque: it is not only that no one dares to exclude a hyperinflationary flash like those of 1989 and 1991, but that a few see it as the way to begin to rebuild the economy. , even aware of the tremendous social consequences that it would generate. Others fear a confiscation of deposits, which was already appealed in the ’90s and 2001.
The back and forth of Milei’s team about the dollarization proposed by the candidate contributes to increasing concern. Senior economic officials from his team have already told EL MUNDO that replacing the peso with the dollar will not be immediately viable. “Only at three years old,” they add. If Milei wins the election, failure to fulfill that promise, very attractive to many Argentines, will be a strong blow to her popularity.
In this context, the Merval, Argentina’s main stock index, fell 18.3 percent in September. Whoever dares to explore the Argentine market today has a good chance of making profits by purchasing excessively depressed papers.
“Today the signals go through politics and are not clear to anyone,” financial markets specialist Fernando Camusso told “La Nación.” “There are not the volumes that one might expect to arrive from abroad, foreign investors are not looking forward to Argentina. Until the country gets itself politically in order, the dollars are not going to appear.”
If after the primaries on August 13, surprisingly won by Milei, the peso was devalued by 22 percent, the sights are now set on October 23, the day after the elections on the 22nd. It is quite likely that the presidency will be It will be decided in a ballot on November 19, but it is not the same as that ballot, presumably with Milei, whether it is contested by Bullrich or Massa.
The behavior of any Argentine when it comes to preserving their savings is to buy dollars, because historically the peso only guarantees losing money. Thus, “Clarín” revealed this week that the big banks “began to make provisions and advance aircraft contracts to fill the treasuries with dollars.”
“Each plane that brings 150 million dollars has a cost of 10,000 dollars, and today in the vaults of all the entities there are 4,000 million in cash to meet a possible jump on October 23 in the demand for dollar bills at the windows” of the banks.
“Just the idea that people could go to the bank window to take out their dollar bills and keep them in a safe deposit box is a further example of the uncertainty. The lack of confidence among savers is manifest,” adds “Clarín” before adding a positive fact: “Unlike other crises, dollar deposits remain in the system and entities maintain dollar reserves in their treasuries to face eventual withdrawals.”