The external deficit: more dollars are already leaving the country for travel than are entering through Vaca Muerta

Miami beats Vaca Muerta.

This is how economist Martín Polo, head of strategy at Cohen Aliados Financieros, summarized a figure published by the Central Bank late Friday: the increase in dollars from the energy sector is not enough to offset the increased foreign currency outflow due to tourism. At least in the first four months of 2025 compared to the same period last year.

Paradoxically, or perhaps not, the week began with two pieces of data that the market and the IMF take into account when assessing the sustainability of the current economic stability.

Monday. The National Institute of Statistics and Census (INDEC) published April figures on tourism and the number of people entering and leaving the country. It was once again found that more Argentines are vacationing abroad than foreigners are spending money in the country. Two data points stand out from this report:

-April 2025 (881,161 people) was positioned as the third April with the highest outbound tourism, only surpassed by 2017 and 2018.

-In the first four months of the year, a record number of such tourism trips was recorded, with almost 6 million trips abroad.

-In April, the balance for the travel account was negative by US$863 million, more than double the same amount as last year (US$335 million).

-In the first four months of 2025, the accumulated deficit increased to US$3.613 billion from US$1.055 billion last year. This imbalance exceeds this year's energy balance, which was even larger: US$1.521 billion was contributed by the energy sector in the first four months of 2024 compared to US$2.404 billion in 2025.

"These numbers raise alarm bells about the sustainability of the external sector," said the consulting firm LCG.

“The growing deficit in tourism is putting pressure on the current account, via a larger services deficit,” said a paper by Cohen.

The monetary authority explained in its Friday report that "approximately 60% of expenses for travel, tickets, and other card payments are directly paid by customers with funds in foreign currency, which reduces the deficit impact of these expenditures on the foreign exchange market." This means that a portion of the deficit is financed with the foreign currency individuals hold or by purchasing it on the stock exchange via the MEP dollar, and the remainder by purchasing it from the BCRA (although the bank currently does not sell foreign currency unless the exchange rate reaches $1,400).

But the market chooses to talk about another phenomenon. "The BCRA uses this explanation to claim that it doesn't provide tourism dollars abroad, but rather that people do so out of their own pockets. But what we're seeing is that dollars are leaving the economy, and that's the only thing that matters," Polo summarizes. That's because just on Friday, Luis Caputo asked merchants to invoice in dollars, and a week ago, he launched a virtual currency whitewash.

The debate goes beyond the principle of imputation and accounting, as to whether dollars from trips abroad are paid with dollars from the Central Bank (BCRA) or from individuals. The portrait of the economy that the IMF's Article IV will paint will very likely include this landscape. Former Economy Minister Alfonso Prat-Gay said this last week after praising the government's lifting of the currency controls ("masterful") but warning about external accounts and the exchange rate. The IMF recommends that the dollar for the quarter following the signing of the agreement should be 20% more expensive than the day before the agreement went into effect : that would give it around $1,316. ​​Almost 10% more expensive than Friday's $1,200 .