Dante Sica: ‘Business people say that they’re selling a little more than expected.’
D@PATOVALLI
ante Sica swapped offices for two days last week, opting for the Buenos Aires City Expo Centre, where the Argentina Exporta (“Argentina Exports”) forum brought together over 2,500 people. In a busy few days, the Production and Labour ministermetwithbusinessleaders and journalists, before holding a crucial meeting with Transport Minister Guillermo Dietrich and transport sector union leaders, who later abandoned their planned strike action scheduled for May 25. At the opening of the [Argentina Exporta] forum you said we wereseeingchangesineconomic indicators. However, the latest economic data remains negative. Is a rebound possible?
Late last year, we began to see it [a rebound]. The crisis is very heterogenous in its impact on economic activity. There was 30 percent of activities with no decline: fishing, mining, energy, tourism, red andwhitemeat.Buttheyrepresent a small percentage of the job market. Business people say that they’re selling a little more than expected. They are not recovering what they lost but they are betteroff. January was better than December and February better than January. In March, with the volatility and inflation, those gains were lost and in April and May we’re seeing it [a rebound] again. Therearesectorswhichareseeing improvements. Will industry find its floor?
It [industry] has experienced a significant negative lag but it is very heterogenous. Metal production for domestic consumption dropped but providers to Vaca Muerta [shale oil and gas reserve in Neuquén province] grew. This first semester we will see sectors whose recession will decelerate, especiallyfoodproduction,among others that are starting to recover. How much do collective wage bargaining deals impact?
In May, we saw double incomes becauseoftheincreaseintheAUH welfare plans, ANSES social securityloansandtherecompositionof collectivewagebargaining.Today, there are six million people formally receiving welfare and three million whose salaries have recovered against inflation. They must now feel the impact. If this were not an election year, we would have a lower country risk and a lower interest rate. The uncertainty over the elections is making the recovery slower. Has it been the case that in collective wage bargaining talks, broadly there has been a 28-percent increase in wages?
Bargaining ended in January, February and the middle of March with increases of between 23 and 25 percent. The ones we have closed now [May] were 28 percent annually with a revision [clause]. We will look at expectations for inflation further down the line. The last Survey of Market Expectations suggested annual inflation of 40 percent, not counting the deceleration of last month. How do they reach that conclusion?
Expectations for inflation in May are dropping. We also look at the Survey but we do not have inflationary targets. We all look at future expectations. The Interior Ministry has told economists that a recovery in consumption will occur in the 100 days prior to the elections...
There is a wage bargaining periodfromMarchtoJune.Fromthe point of view of all formal workers, these will be completely finalised by the end of July. But in thenext15dayswewillhavethree million workers seeing an impact in their wages, stemming for instance from the ones agreed to with the UOM [Metal Workers Union], which comes into effect next month. Is the opposition’s definition of candidacies having an impact on the government’s electoral strategy?
We are clear about our candidate, our policy programme, and the reforms we want for a more competitive Argentina. The definition of candidates does not change what we’re doing. Does the Fernández-Fernández ticket favour the government?
The opposition has to resolve the issue of its candidates. We have until June 22 to see which coalitions will run and how many candidates there will be. We [the government] are focused on our campaign and our reforms. Are you reassessing the issue of export dollars and Brazil?
We are not correcting this yet. We are seeing an over-harvest in comparison to last year. What falls because of price may see compensation in volume. And while it’s true that expectations with Brazil has been lowered, we will still see growth compared to last year. There are terminals that are reviewing upwards their forecasts for the second part of the year. That could be beneficial.