The Deputy Minister of Economy, José Luis Daza, The exchange scheme implemented by the National Government defended this Thursday by ensuring that The exchange rate “is not ironed or controlled” but “is floating” without the intervention of the Central Bank (BCRA) and stressed that “it will be determined by supply and demand of dollars.” In addition, he relativized the deficit of the balance of payments and, in the future, predicted a inflation lower than the global average.
The Secretary of Economic Policy of the Ministry of Economy that leads Luis Caputo He participated in Argentina Economic Forum organized by him Institute of International Finance (IIF) at the headquarters of the Banco Galicia, where he made a presentation to defend the economic plan of President Javier Milei. There he dismissed the versions that claim that the dollar is under control of the Central Bank And it surprised to point out that Argentine inflation could even be located below the world average, once the variables are accommodated.
At the summit that brings together larger banks in the world, The Chilean economist relativized the external deficit Informed on Wednesday when considering that Argentina is currently going through “A gigantic change in the balance of payments” that will allow raising the surpluses of the energy and mining sector to figures between US $50 and 60 billion dollarsa level that described as “equivalent to two Argentine agros.”
Anyway, he assured that the government “The balance of payments will monitor”after the official information reflected a deficit of US $ 5,200 million, near twice as estimated by the Monetary Fund International for all 2025. “In the crises in other countries years ago, there was a great current account deficit. But import the quality, reason and magnitude. A 2% deficit of GDP in a country that grows at 6% is expected and reasonable”He evaluated.
“We feel comfortable with this level,” Daza remarked and pointed out that it is a deficit that is explained “to a large extent by the investment.” And compared it with other scenarios worldwide: “In 2008, Spain had a 14% deficit of GDP.”
José Luis Daza spoke of the sustainability of the dollar, deficit and inflation
On the other hand, he also referred to the sustainability of the exchange rate. “It is a very complex issue. I do not know what will happen. If I were an entrepreneur, what I would not do is bet that a depreciation will save me. It is very possible that the exchange rate is strong in what is coming,” he said.
In his defense, the vice minister argued that The country “is decapitalized” Therefore “it is reasonable to have current account deficit.” In addition, he stressed that it is funded by the private sector and that public savings are strengthened. “There is a breakdown from the treasury and we are increasing the investment,” he synthesized.
In another passage from the talk, Daza talked about the economic program. “It represents a break with history, not only from Argentina but from the West in recent years”defended and recalled that the government assumed “on the verge of hyperinflation and financial imbalances of a magnitude not seen before.” As he said, the possibilities of avoiding a “enormous proportion” crisis were “highly unlikely,” but the government managed to fulfill it without neglecting international commitments.
For Daza, Argentina “was the most volatile country in the world” until 2023 and part of that volatility was explained by fiscal deficits: “Without capital market, it was financed with monetary issuance or debt restructuring.” However, with the arrival of Javier Milei, the commitment to the fiscal balance and the zero deficit became an “unwavering” and “central” plan of the plan.
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So far from the mandate, the central administration “lowered the cost 30% in real terms the first year,” he said. In addition, he highlighted the improvements in the financial program, the management of the debt, the relationship with the IMF and the local markets. He also pondered monetary policy, after “a mesh of distortions that made not work well.”
On the other hand, he also talked about the link with the IMP and revealed a dialogue with its headline, Kristalina Georgieva. “When we went to ask him that we wanted to move on to a flotation system, he said: ‘Toto, when they told me you wanted 20 billion dollars I said it was impossible. But I remembered when in December 2023 you told me that they were going to close a 5% deficit of the GDP and also said impossible. They did what no country could do in many decades. Now I’m not going to tell you impossible, if you show me the data, I’m going to support you, ”he recalled.
Regarding the evolution of inflation, Daza He argued that with the fiscal and monetary economic adjustment plan “We broke your spine”. As he said, “This rate generates problems that transcend what is seen in the numbers” and affect the quality of life. “It is essential to start by normalizing inflation. It will converge to the rest of the world,” he said. In addition, he predicted that it could be lower than the world average. The IMF projected the global average inflation by 2025 in 4.2% per year.
Regarding the level of debt, Daza clarified that “we are in a process of wisdom marked and sustained over time” and emphasized the role of economic growth that is being recorded and in the order of public accounts to accelerate this process. In this line, Daza said that “the debt is being lowered and in the process we are improving the quality of the debt.”
Source: Ambito
