What the analysts (and Bergara) thought about the numbers that Arbeleche showed

Between the numbers exposed by the minister Azucena Arbelechehighlighted that the economy would have grown 4.5% in 2021, exports reached a historical record of US$ 11,550 million in 2021 and poverty was reduced by 50 thousand people in the first half of last year.

In addition, the economic team announced that it expects product growth of 3.8% by 2022, generating 40,000 new jobs and allocating US$400 million to the Covid Fund this year.

The director of the CED, Agustin Iturraldesummarized that “roughly there is a 2021 that closed at the pre-pandemic level; with some difference — employment a little more, salary a little less — but basically at that level.”

However, he recalled that this starting point “was not particularly good.” “We came from five years of little growth and job destruction, two years of falling household income… We have reached the pre-pandemic level: we have to see how we build above“, he declared.

Iturralde sees that for the first time since assuming power, the current administration “has good results and a clear horizon in the short term“.

“It is a government that prioritized employment over wages and targeted spending over generalized spending, as it happened with the expenses towards health, the vulnerable population and children”, analyzed the specialist. “There is an issue of political preferences that can be discussed but they are consistent”.

For his part, the economist Ramon Pampinfrom the PWC consultancy, maintained that fiscal management was the most outstanding of what was presented by the MEF.

“We were quite committed and we managed to meet the fiscal goals for two years. If you go to 2021, what most worried analysts was losing investment grade,” he said. “Not only did this not happen, but there was some change in the (positive) bias in the assessment of some rating agencies.“and” that is not given to you, “he assured.

In 2021, the fiscal rule was fulfilled in its three pillars. The structural result included in the Rendering of Accounts was a deficit of 3.2% of GDP and finally it was 2.6%. The primary spending growth ceiling was 2.3% and finally it was 1.7%. And the indebtedness ceiling that was US$ 2,990 million was located at the end of the year in US$ 2,563 million.

However, Pampín added that “it is also true that when we do not have the covid scenario, there may be expenses that increase. Surely the item of remuneration has fallen temporarily“, he warned. The same could happen with other components such as non-personal expenses, transfers or investments.

From another point of view, Nicholas CichevskyCPA manager, said that the main news was the GDP growth projections (both for 2021 and for this year) and the data on the use of US$ 400 million for the Covid Fund in 2022 —which were not foreseen in the Accountability-.

For Cychevsky, “the improvement in growth prospects tempers in a certain way those extra US$ 400 million that will have to be financed for the Covid Fund”. The increase in the product above what was previously expected “allows the fiscal result for 2022 to be maintained despite the additional expenses,” she observed.

At the beginning of last year, the MEF itself forecast growth of 3.5% in 2021, which ended up being exceeded by one percentage point, according to the current estimates of the economic team.

On the other hand, the 3.8% expansion of the economy projected by the government for this year is slightly higher than that calculated by analysts consulted by The Observer —which represent between 3% and 3.3%— but this agreed that it remains “within reason”.

Bergara’s review

Senator for the Broad Front mario bergara He dispatched his criticism in relation to the numbers presented by the Ministry of Economy and Finance in a thread on the social network Twitter.

“They told us that they had to be evaluated for fiscal deficit and inflation. Today inflation was left aside. Why is it?“, questioned the former president of the Central Bank (BCU). In September 2020, Arbeleche told The Observer that The commitments of the economic team are two: “The target range for inflation and the fiscal target. It is what they have to measure us with and what we are going to build credibility with“, he stated at that time.

Despite good fiscal results, inflation stood at 7.96% in 2021, above the ceiling of the target target range (7%). This year, the official projection is 5.8%, although analysts surveyed by the BCU estimate 7% and businessmen surveyed by the INE, 8%.

The Minister of Economy was asked about inflation in the round of questions at the end of the presentation, but did not answer because it was a matter handled by the BCU and not from the Ministry of Economy and Finance. In her conference a year ago, the minister did not allude to the inflation figures for the same reason.

Bergara also pointed out that GDP growth was pushed “to the pure export of items with exorbitant international prices and enormous Chinese demand” and that it could “have given double welfare” without breaching the fiscal goals, according to him.