Sharp drop of 10% in national economic activity during March

Economist Marina Dal Poggetto estimated that economic activity fell 10% in March as a result of a collapse in sales, and warned of increased costs for companies. She also pointed out that between December and January, almost 90% of prices rose every week, while now, that percentage drops to 40%.

“That is, there are still price increases but not every week. And in fact, some fall. Therefore, we estimate that April inflation would be between 8% and 9%, but if the rise in prices does not ultimately impact prepaid because these roll back the increases, it will be in the order of 7%,” he considered.

Dal Poggetto explained that for inflation to go down “there is an exchange anchor, since the official dollar is moving at 2% monthly. And that is added to an extraordinarily very recessive context, with very aggressive sales drops, of up to 50% “.

Likewise, he indicated that “there is a decomposition of the income of informal workers and a recomposition of the income of formal workers and the public sector, which very partially compensate for the fall of the last two months.” to inflation and the dollar continues to run behind, the salary will be perceived as a cost by companies,” evaluated the economist, in statements to the Rivadavia radio program “This morning.”

In his opinion, the other side of this salary increase “is an increase in costs. Companies are worried about this increase, because they are not selling and because with this level of exchange rate, systemic competitiveness is damaged.”

“Thus, the collapse in sales translates into a drop in the level of activity. Our projection is that GDP will fall 10% in March. It is a very sharp drop,” he warned. And he stated that President Javier Milei “continues to maintain his image with a narrative, since anything that is said he says is a lie, such as that there was no cut for the universities.”

According to the School of Government of the Torcuato Di Tella University, the Government Trust Index (ICG) corresponding to the month of April 202 – it is measured on a scale from 0 to 5 – was 2.45 points, with a drop 4.4% compared to the month of March 2024. In interannual terms, the index had a positive variation of 128.7%. The current level of trust is 9.9% lower than the April 2016 measurement at the beginning of Mauricio Macri’s government, and 25.4% lower than the April 2020 measurement, at the beginning of Alberto Fernández’s administration.

The Central Bank of the Argentine Republic (BCRA) broke the buying streak and sold foreign currency for US$92 million at the beginning of the week. This situation occurs for the fourth time since Javier Milei’s administration. Yesterday the monetary authority must transfer approximately US$1.95 billion to pay the April installments it has committed to the IMF.

Affected by the adverse weather and the strike of oil workers and SENASA employees affiliated with ATE from the ports in demand of the restitution of the income tax of the fiscal project, the volume of money negotiated in the cash segment was less than US$285 millions. For these reasons, the Government had to sell foreign currency to meet the demand mainly from importers.

Regarding the strike that paralyzes agricultural exports and will last for 72 hours, sticking to the May 1 holidaythe president of the Chamber of the Oil Industry (CIARA -CEC), Gustavo Idígoras, highlighted that although “he fully agrees that the salary should not be part of the income tax, he considers it contradictory to paralyze the industry that pays very good salaries for “Let those who maintain their jobs with great effort lose money.”

In this way, the monetary authority accumulated US$ 3,154 million in net purchases in April and since December 2023 it has totaled US$ 14,530 million in purchases. With this drop in the level of gross reserves, they are once again below US$30,000 million and tomorrow they will fall around another two billion, due to the payment that the Government must make with the IMF for the month’s maturities. of April that accumulated for the last business day.

There is still no official confirmation, but additionally on Friday, it should also face, as interest, another payment to the Fund for approximately US$750 million. The balance of gross reserves closes, the penultimate round of the month, at US$29,877 million, dropping 260 million since the last closing.

A technical team from the International Monetary Fund (IMF) is in Buenos Aires for the eighth review of the extended facilities agreement, the organization reported. The arrival of the IMF officials occurs at the same time that the head of the Central Bank, Santiago Bausili, is in China with the objective of renegotiating the currency swap with that country for a total of 4.9 billion dollars.

“We will provide updates in due course as discussions progress in the coming weeks,” the IMF officially reported. “The objective of the Fund continues to be to support the authorities’ ongoing efforts to restore macroeconomic stability, support working families and to lay the foundation for stronger and more sustainable growth,” they added from the organization.

The AFIP extended until May 31 the deadline to submit an Income Tax sworn declaration form, corresponding to the 2023 fiscal period. This is form F.572 Web, which is presented through the “Registration System and Update of Income Tax Deductions (SiRADIG)-Worker” on the page of the collecting entity.

The measure was formalized through General Resolution 5507/2024, published this Monday in the Official Gazette, through which the deadline in question was extended from April 30 to May 31. Likewise, the AFIP established that withholding agents will carry out the annual settlement corresponding to the 2023 fiscal period until June 28, 2024, inclusive.

The amount determined in that settlement will be retained or, where appropriate, refunded, when the first payment is made after the settlement date or in the following payments if it is not sufficient, and until July 10, 2024, inclusive, according to with the official text.

Also, the agency determined that the amount must be reported and entered until the expiration dates established for the presentation of the sworn declaration and entry of the resulting balance that operate in July 2024 of the Withholding Control System (SICORE), recording as the date of retention on June 28, 2024.

The AFIP justified this measure by pointing out that “it is necessary to implement measures in accordance with the parliamentary deadlines for the enactment of laws, considering, in turn, their impact on the annual settlement” of Profits.