The influential financial newspaper remarked the fall in monthly inflation in Argentina, although he warned that the country needs external support to sustain its economic plan.
The Wall Street Journal He stressed that the government of Javier Milei He achieved progress Against inflation Chronicle, but warned that the country faces exchange risks and needs external support. The analysis highlighted Donald Trump’s help announcementstressing that Argentina’s structural problems remain deep, and that “it will need help for the rest.”
The analysis remarks that since December 2023, the libertarian government cut subsidies, regulations and public employmentachieving a primary fiscal surplus and eliminating the financing of the deficit by the Central Bank. As a result, “monthly inflation It collapsed 1.9 % in Augustfrom 12.8 % of the month in which Milei was chosen. ”According to the journalist Greg LP, “Somehow, Milei broke the cycle.”
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However, IP warns that a weak point persists: the dependence on a fixed exchange rate. Argentina, unlike other countries, maintains parity with the dollar to avoid an immediate transfer at prices, but lacks enough reservations To sustain that strategy. “Depreciation quickly translates into inflation. This is the threat that the country faces now,” he says.
Political risks and US support
He Electoral reverse in the province of Buenos Aires From September 7 alarms in the markets, given the possibility of a legislative setback that compromises the reforms. According to the WSJ, “The weight initially collapsed” for fear that tax and regulatory changes will be reversed.
Milei with Scott Besent
In that scenario, the United States support Acquire a central role. Donald Trump, through Treasury Secretary Scott Besent, announced that Washington could attend debt purchase, credit lines or exchange mechanisms. Even so, the newspaper warns: “Argentina has received numerous bailouts. Clearly, its problems are deeper.”
Regional comparisons and diagnosis
The editorial compares the Argentine experience with Mexico and Brazil, which exceeded similar crises through the independence of the Central Bank and tax and institutional reforms. The economist Mónica de Bolle recalled that Brazil left parity in 1999, applied inflation goals and achieved stability.
For its part, former IMF official Claudio Loser reinforced the diagnosis: “Fundamentally, Argentines are the only important country that has not achieved macroeconomic stability.” According to the WSJ, while Mexico and Brazil maintain a single digit inflation since 2000, Argentina averaged 70 % in the last decade.
Source: Ambito
