In the prelude to the elessons 2025the economist Daniel Artana analyzed this Saturday the Argentine economic panorama and warned that the current financial scheme “is not sustainable”. According to the head of the Latin American Economic Research Foundation (FIEL)the Government faces “a precarious balance” sustained by extraordinarily high interest rates and persistent demand for dollars.
“These rate levels cannot be sustained. If the only way to keep the exchange rate below $1,500 is with extravagant interest, that won’t last“, he said in radio statements, when evaluating the scenario prior to the elections.
“Before each election, we Argentines dollarize”
Artana described a historical pattern that is repeated in the local economy: “In each previous election, we Argentines dollarize. And if the fear of a return to populism appears on top of that, this dollarization accelerates.”
From the partial lifting of the stockshe explained, the Argentines They buy about US$4,000 million per monthwhich generates pressure on the exchange market and fuels uncertainty.
The economist pointed out that the Government’s challenge is moderate volatility without forcing the market. “When attempts are made to artificially contain the exchange rate, the delay ends up damaging the real economy.”, he warned.
Growth and fiscal balance
Artana also referred to the recent speech of the president Javier Mileiwho stated that “the Government is not here to fix the microeconomy.” The economist partially agreed, although he noted differences: “The State cannot put money in people’s pockets like before, but it cannot ignore growth either. Without activity there is no improvement in income or sustainable employment”.
At the same time, he stressed that the high rates to contain the dollar They had a negative impact on the productive economy. “If companies do poorly, they do not necessarily fire people, but they stop paying overtime or bonuses, and that is also a loss of income for workers.”he explained.
Regarding the public accounts, he insisted that the Fiscal balance must continue to be the pillar of the economic program: “The claims to the State are infinite and many are valid, but if the accounts do not close we return to the inflationary cycle. We must discuss priorities within the balance”, he stressed.
Dollar, inflation and investments
Asked about the relationship between devaluation and inflation, Artana highlighted that the economic program “broke the inertia that every depreciation triggers prices“, and considered it “a merit of restrictive monetary policy”.
Regarding the exchange rate regime, he proposed moving towards a freer floatingbut with sufficient reserves to cushion the ups and downs. In that sense, he pointed out that the swap with the United States could serve as an anchoras long as “it is not intended to go against the wind of the market.”
Finally, he was skeptical about the climate for attracting capital. “Nobody is going to invest US$15 billion in mining or Vaca Muerta if there are no guarantees of stability for the next three decades”, he stated.
Source: Ambito
