After 2018 marked by devaluation of the peso, inflation at 48% and the recession extends to almost all activities, the big question is how the economy will start at the beginning of the new year. Official estimates, from the budget, predict a decline in GDP of 0.5% for all 2019.
Specialists, in this case, estimate that the first quarter is "difficult" and "complicated" because the variation in inter-annual activities in general will continue to fall, reflecting the conditions of what happened in 2018, they explained. However, the recovery will come very slowly from the second quarter with an increase in several sectors of activities and wages. The main question is what will happen with exchange rate stability, interest rates and country risk, which at the current level implies serious financial pressure, they propose.
One of the priorities in the 2019 economic agenda is that the Central Bank managed to reduce interest rates without the dollar coming out, "said Federico Furiase, an economist at the Go Eco consultant." It is also necessary that wages recover against inflation. Something that today looks complicated in a context where political uncertainty takes the risk of the country, "he said.
Country risk, the variable that follows the performance of Argentine bonds abroad, "leaves the Central Bank without margin to move faster to reduce interest rates. With that, it is also difficult to increase credit, which in turn, companies need to finance together," he argued. In short, analysts see, in the short term, "a gradual recovery of real wages, the most stagnant credit and in this context, companies that might have some unemployment," he said.
For Lorenzo Sigaut Gravina, an economist at Ecolatina, the first question is how the calm of exchange rates continues. "With state risks exceeding 800 points, it is clear that Argentina does not have access to financing. And while, while the state complies with IMF requirements, disbursement will be available during 2019, then it must go out and place debt in mid-2020," he explained "It is this financial uncertainty that obscures the outlook," he said.
On the other hand, "we can have a favorable first half, with a recovery in some sectors, with income that will start to grow more, given that there was a formal opening of paritarias in April, unions that have automatic wage adjustments and other adjustments for mobility retired ".
Agricultural yields are a favorable point for the economy to come, "especially in corn and soybeans, which have rebounded strongly after the drought," said Sigaut Gravina. "And also other tradable sectors that react with the highest exchange rates, such as agriculture, mining, oil and gas, among others. Perhaps, some industries, such as the automotive industry, have managed to export more".
According to Ramiro Castiñeira, from Econometric, 2019 started "ironing", "touched the floor" crisis. With the exception of Tourism, which is the only candidate to recover, the first quarter of this year was "still difficult". Only after the second quarter, with agricultural harvests, can begin to soar activity, estimates.
Fausto Spotorno, economist at the Ferreres & Asociados studio, also believes that the first quarter of 2019 was complicated. "Except for tourism, there are no variables that drive the economy too much. But after the second quarter, positive data can come, from the hands of agriculture, which will have faster growth, and some industrial sectors," he said.
On the inflation side, which this year peaked at 48%, economists agreed that it would remain lower during the following year. In fact, according to Central Bank analyst expectations, the price index (CPI) will rise 27.5% in 2019.