The statements and warnings that he made, in public and in private, The Minister of Economy, Luis Caputoadded to those of the president itself Javier Milei Against the projects promoted by the opposition this Thursday in the Congress show the limitations of the economic plan promoted by the government. These legislative initiatives would imply an increase in spending, which could put efforts in the Fiscal adjustment and add pressure to dollar And, therefore, to the Low of inflation In the prelude to the elections, according to the look of the economic team.
The initiatives referred to by Caputo are five. Three already have a half sanction of deputies: The increase in retirement, the emergency in disability and the extension of the pension moratorium. The remaining two have the approval of the governors: the distribution of the contributions of the National Treasury (ATN) to the provinces and changes in the co -participation of the Liquid Fuel Tax.
After his “off the record” was made public with the journalist Alejandro Fantino, the Minister of Economy assured in a television interview that These projects have a fiscal cost of 2.5 points from GDPwhich would break the “zero fiscal deficit” pattern, the most important anchor of the economic program.
Besides, Caputo anticipated that, in the short term, “there will be volatility” in the price of the dollar Even the elections, although it ruled out the possibility of “cimbronazos.”
Increased uncertainty
The chief economist of the consultant Epyca, Florence Florentínhe considered the possibility that the approval of the projects promoted by the opposition “It can have an effect in the short term”although he did not awarded it to strictly economic, but political noises. “It would show a certain weakening of Milei’s alliances, which until now allowed the Executive to make many decisions beyond Congress,” he explained to this medium.
For that reason, he stressed that “if Congress begins to give some limits that the government cannot overcome (as it did last year with the vetoes) it can generate some uncertainty about the continuity of the libertarian model.” From your perspective, those projects “They are the manifestation of the unsustainable of the fiscal adjustment of the national governmentwhich is done at the cost of infrastructure, educational and health systems, science and technology “.
THE BRAKE TO ADJUSTMENT
During 2024, the public spending adjustment carried out by the Milei administration was 4.5% GDP, which allowed him to move from a primary fiscal deficit of 2.7% in 2023 to a 1.8% surplus that year. According to Iaraf, that implied a reduction in primary expenses of 27% in real terms, The greatest tax adjustment in 31 yearsand with 30.6% explained by the cut to retirement and social programs.
For his part, the researcher specializing in local economic policy of the Argentina Grande (IGA) Hernán Herrera He argued that “The Government is overcoming the dispute with the governors”. According to IGA statistics, the cost of all measures that would be treated this Thursday “They do not add more than 1.5 points of GDP”. In the first five months of 2025, the National Public Sector (SPN) obtained a primary surplus equivalent to 0.8% of the annual GDP.
And he deepened: “I do not believe that 1.5 points in this context is a problem for the macro. To the extent that the financial scheme is not affected.” However, he said that “It is so fragile that they financially put together that, If markets tremble, everything is complicatedbut they should not tremble for this if the government will rule as it should. “
These estimates are similar to that of other consultants. For example, ANALYTICS calculated that the fiscal impact of the five projects during 2025 would be equivalent to 0.49% of GDPwhile if they annualize, That number would rise to 1.12% of the gross internal product, well below the estimate of the Minister of Economy.
Dollar and the postponed reservations problem
A central element when evaluating fragilities is the level of accumulation of reservations of the Central Bank, which already generated doubts in local analysts and even in large banks of Wall Street, such as JP Morgan and Barclays. This week the Government had to pay bond maturities Global and bonares by U $ 4,300 millionwhich made gross international holdings go down to US $ 39,168 million and that the nets are located in US $ 3,750 millionaccording to Personal Investor Portfolio (PPI).
On that point, a report of Mediterranean Foundation signed by the president of Ieral, Osvaldo GiordanoHe argued that “the official option is to increase the priority to consolidate and deepen the decrease in inflation” in the face of provincial and national elections. However, That has as a counterpart “sacrifice other economic policy objectives”among which he mentioned was the issuance of pesos to buy dollars.
“While it appeals to other ways to accumulate reservations, They are more expensive and insufficient alternatives To meet the goal of accumulation of reservations provided for in the agreement with the IMF“Giordano said. However, Caputo said they are approaching that requirement, which was breached on June 13 and postponed for this month, through revenue from bond placement and a new“ Block Trade ”for around US $ 400 million.
Meanwhile, from echoing skeptics are for the second semester, especially before The increase in current tourism deficit by tourism. “With a scarce export offer, the indebtedness of companies and provinces will be fundamental to cover the greatest demand for dollars that will surely climb as we approach the elections“They raised from the consultant led by Marina Dal Poggetto.
Source: Ambito
