Argentina Election
The Radicals' Economic Spring Plan is boosting President Macri's numbers toward reelection
Sales turned around in June and Macri's approval ratings went up by six points. Still, specialists warn that this is an "unstable balance".

The President of Argentina Mauricio Macri was very critical of the adjustment package proposed by Congresswoman Elisa Carrió, from the Radical Civic Union party. The package consisted of exchange rate stabilization, delay in the raise of tariffs, and an artificial impulse to consumerism. In spite of being implemented in mid-April, the President was clear on the measures that support this subsided consumerism, freeze the price of the dollar and delay the exchange rate. However, thanks to this mini Spring plan, some economic indicators changed the tide and now allow the Government to be enthusiastic about reelection.

For example, in June, for the second time in over a year, retail figures turned around, as reported by CAME, the Argentine Chamber of commerce. The Index of Consumer Trust, which Universidad Di Tella measures monthly, also showed a strong comeback. An 11.2% leap, from May, was shown, because during June the dollar price lowered by 5%. This improvement increased at 13.8% in Buenos Aires, an area that has shown resistance to Todos por el Cambio, the President's electoral coalition.

This was not the only surge. Because of this growth, between May and June, Macri's approval went up from 28% to 34%, according to figures reported by polling firm Poliarquía.

"If this social climate keeps improving during the next four months, the chances of the Government winning reelection are very high", Alejandro Catterberg, CEO of Poliarquía, said in an interview published on Monday by Bloomberg. "My intuition is that Macri will win, but if I only observed the economic indicators, I would suppose that he will lose".

This perception is shared by the investment bank Morgan Stanley, which, as reported by LPO, showed that confidence in Macri's government grew 15% between May and June thanks to the stability in the exchange rate, but not enough to pull the Government from the no-continuity zone.  In this matter, specialists warn that provisional data indicate that the elections will be defined in a second round.

Poliarquía poll: Macri's approval rating grows while Cristina reaches a record high

Negri, Rozas, Naidenoff and Lousteau during the Radicalism convention in Parque Norte

Sales rose by 18.2% in June compared to the prior month, and so they reduced their mid-year drop of 14.2% in May, to 12.2% in June. This is a second positive signal in the year (in March, sales had recuperated 3.5% and had reduced an 11.3% mid-year, but then there was a drawback). This time, the monthly rebound was influenced by Father's Day, but still, sales are expected to hold up.

"[Credit program] Ahora 12, which many stores began to apply without interest, proved in no time that it is an indispensable tool. Accompanied by larger liquidity, positive signs are shown which generate expectations on how the sector can be re-ignited", said the head of CAME, Gerardo Díaz Beltrán.

However, for economist Hernán Hirsch: "It is difficult to talk about a recovery, but we may talk about stability. The level of activity stopped falling in May, although we are still in an unstable balance".

"The Government is betting on everything going according to plan: an electoral victory, plus the country risk descending to the ideal 600 points with a tendency to drop towards the end of the year. If they make it, then there might be a chance for an economic recovery, although they would have to be ready because there are still matters like the semi fiscal deficit, generated by the movement of [Government Bonds] Leliqs. If they do not make it, we are headed toward another correction, the rise of the dollar, and a different level of activity drop. For this, it is essential that a global context holds up", he explained to LPO. 

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