Ambito, The improvements in the interchange terms

Ámbito Financiero Newspaper (Argentina)
Pablo Tigani*

The improvements in the interchange terms value basically the increase in international prices favor us, as the case of petroleum and commodities, which in the past harmed us.
The increase of soybean price particularly stands out because it represents the 50 percent of total agricultural production. The soybean exporter sector represents the fourth part of total argentine exports and it means 45 percent of annual retention tax.
Also petroleum is very important and represents 18 percent on the total exports and contributes with Pesos 1.9 billion from export tax. The impact of the improvement in the prices of our products is clear. If we had had the same prices from year 2001, we would have received U$S 3,4 billion less than 2002 (2,83 pct of GDP).
In consequence, the best prices allow a great income by exports, greater commercial surplus and surplus in the current account balance of payment, which becomes a pillar in tax collection in the strategic scheme of fiscal sector.
It’s good that God’s hand has begun to move in Argentina, since we can’t decide by ourselves the increase of prices of our exports.
The Euro has been revalued and also operates in our favour when in the past was the opposite (the Dollar was revalued against the Euro almost a 40 percent between 1996 and 2000). This is very important because the increase of the Pesos that come in exchange of Euro benefies the 20 pct of our exports, which go to Europe.

Fortunately, the world has also continued slow growing but with low inflation rates, which allows that interest rates remain low. This low rate and the abundant international liquidity have contributed to capital flows beginning to circulate again towards the emergent countries, causing an improvement of the country risk indicators and a devaluation of dollar.
That is to say, we are living all the opposite of what happened to us in previous years, in the previous process of the economic collapse. Although low interest rates do not directly benefy us because of our “default” situation, we could espect that a part of U$S 33 billion that escaped from the country in a year and a half, would return due to the low international yields.
Even though the opponent sectors protest to Minister Lavagna about not having presented a long term - integral economic program, the present conjuncture scene is stable and it can be taken care of the urgencies emerge from four years of recession, where some of them passed with strategic plans that didn’t prosper.

The negotiation with the IMF is the key to structure a later program, according to the restrictions that the agreement or "non agreement" with this international organism of credit will determine, including the restructure of the “bond festival”.
Additionally, the GDP´s forecasts of growth would be over 5 percent in 2003.


The consumption is increasing impelled by raise of the real wage, a great monetary injection, the consumer credit through credit cards and the advance of the consumers’ confidence.
Simultaneously, it improves the investment impelled by the construction and the great demand of durable goods.
In this way, it does not seem an uncontrolled situation as the “fateful commentators” usually raise with marginal propensity to the nightmare.

* President of www.hacer.com.ar