Argentina expects record $90b exports on commodities boom

Bloomberg

Argentina’s government is expecting record export levels this year as the nation benefits from the surge of commodity prices.
South America’s second-largest economy is forecast to export $90 billion of goods this year, according to a senior government official who asked not to be named to discuss unpublished projections. That would be at least a 15% jump from last year’s mark and 38% higher than 2019 levels.
Service exports are expected to reach approximately $12 billion this year, according to the official.
Argentine exporters are having a bumper year as prices of the nation’s top crops, such as soy, wheat and corn, have surged. The government is also making a concerted effort to boost exports in its energy and tech sectors, providing more access to dollars for companies that export in those industries.
Argentina needs more export dollars to help comply with its $44 billion agreement with the IMF. Beyond the direct economic boost, exports also shore up the central bank’s net cash reserves, a key barometer of the program that many analysts already see off track.

Rising Inflation Leaves Shoppers Adrift
When prices rise fast enough for long enough, consumers can lose any sense of what they should’ve been paying in the first place. That’s an extreme case of what’s known in economics jargon as “unanchored expectations” — and in
Argentina, it’s the daily reality.
With inflation at 58% and accelerating, the $500 billion economy is an outlier even in a world where prices are taking off almost everywhere. It’s not just a pandemic-era problem: while the historical statistics are suspect, Argentina hasn’t had single-digit inflation in at least a decade.
As prices soar and scatter, people are losing their bearings. No wonder, when a two-hour domestic flight costs the same as a month of college tuition, a pair of sneakers is equal to the minimum monthly social-security payment, and a new iPhone goes for half a year’s average rent or more. Price-tags also vary wildly from store to store, and tracking down the daily essentials at the least-unaffordable rates is a drain on time and energy for working Argentines.
“Nobody knows how much something costs,” says Federico Moll, director of economic research at consulting firm EcoLatina in Buenos Aires. “Talk to any Argentine of a certain age and they can tell you how much something went for in the 1990s, but they don’t remember how much something costs today compared to yesterday.”
Few countries are likely to suffer a melt-up in prices on that scale. It took decades of seesawing politics and zigzags in economic policy for Argentina to get here. Politicians repeatedly failed to keep government spending under control, central bankers kept changing their monetary plans, and the country suffered a currency crisis in 2018 amid a wider flight from high-risk emerging markets.
Still, amid a wave of global inflation there are some wider lessons in Argentina’s experience. First, once prices spiral it can prove almost impossible to get them back under control.
Second, political careers will likely end along the way.
Now it’s President Alberto Fernandez in the hot seat, with approval ratings that are sliding as prices soar.
His government is publicly at odds over how to deal with inflation. The powerful vice president, Cristina Fernandez de Kirchner, slammed Fernandez’s team earlier this month for failing to rein in prices -– and said Argentina’s latest agreement with the International Monetary Fund, seen by investors as key to getting the economy on track, will only push costs higher still.
In the latest sign of infighting over inflation, the top official in charge of price controls — a Kirchner loyalist — quit last week, citing differences over “the path taken and the economic tools chosen.”
Higher international energy prices have slowed the central bank from building up its net foreign reserves, a key aspect of the government’s plan to cool inflation and anchor expectations this year, according to a senior official who asked not to be named to discuss internal conversations.
Rising prices forced the government to pay for natural gas imports earlier than expected, delaying the