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Dal Poggetto’s definitions of 2023

Dal Poggetto’s definitions of 2023

Once the inflation rate rises to 3 digits per yearonce you have a 100% exchange rate gap, once you have a dispersion of relative prices where there are prices that lagged strongly behind -prices that are ridiculously expensive compared to the rest of the world- what you have to do to put that economy back on track is to have a stabilization program and what Massa is doing is not a stabilization program. What he is doing Massa is a program to try to get to the other side and then we see The novelty is that it achieves some ‘successes’ in the face of what was the inflationary dynamic of July last year, where Cristina passed the pen to Alberto (Fernández), Alberto passed it to Cristina (Fernández de Kirchner)”.

“Now, the scheme that Massa uses to contain the price system how sincere in a report that Verbitsky makes to him when he asks him: ‘Why didn’t the price agreements for Feletti or Paula Español work for them?’ and he answers: ‘What happens is that they did not handle the administration of foreign trade‘. So, after the confession of the parties, I release the evidence. What it is doing, in some way, is taking advantage of the gap instead of correcting it -which is the main distortion that the economy has-, in order to be able to negotiate by sector. Therefore, it is negotiating sector by sector, achieving a certain slowdown in prices,” he stressed about the agreements promoted by the minister.

However, he anticipated: “In January the noises begin. one is the gapanother is the price of the meatWe have to see what happens with the parityand the agreements fell apart earlier, largely because the promise of access to the foreign exchange market was not fulfilled. Price agreements as an inflationary program do not work. They are part of a stabilization program but with other measures.”

This is an attempt to arrive and it is gaining time. The dynamics of this election year will be the economy defines politics but politics will also define the economy. The end of the story is not written,” he added.

Regarding the issuance of debt in pesos, he remarked that the Government postpones maturities: “It has a serious dynamic with the pesos, especially the debt in pesos, and how it moves with those peso maturities that today you have a broken yield curve. For now, it is gaining time, it is stretching maturities, it has been giving some fiscal signals regarding the agreement with the Fund.

However, he compared Massa’s measurements with those of his predecessor, Guzmán: “Contrasted against what was Guzmán’s economic policy scheme is that Massa does and nobody scrapes his ranch. The Fund does not bother, nor does it object to exchange rate splitting or direct intervention in the bond market in pesos or the repurchase of debt in dollars and if necessary it moves your goals so that you can meet them. Massa’s government coalition does not object. Guzmán is hung from the public square for half of the things that Massa is doing. Cristina lets Massa be. And there it goes. We have to see what happens with the rearrangement, if he is a candidate or continues to be a government minister.”

Regarding Together for Change, he pointed out that Massa’s efforts affect the impact of opposition expressions: “For now, the opposition coalition does not rank behind a candidate. I was talking about cooperation in the transition and that is very difficult when what the current government wants is to kick the problem for the next one. and fundamentally what is being seen is the establishment of union employers who, somehow, find a valid interlocutor who has a lot of carrots to negotiate and negotiates“.

“There is a long way to go. It is an election year,” he said about the elections that will take place in August and October and added: “The stage is very unstable and hard to think. It will depend a lot on there being a cooperation scheme. And when I talk about cooperation, I mean that whoever comes respects the contracts in pesos. It seems very difficult to think that.”

“The statement of Together for Change did not generate anything in the Market. That same statement 3 months ago maybe yes. The political order depends on how the economy develops, but at the same time what happens to the economy will define the political order. And now there’s a scenario that doesn’t seem to get any worse than the situation you’re standing in.”

Finally, I present the keys for the year that is beginning: “With the inflation rate at these levels and with an economy that has a country risk where you do not have the capacity to access the credit market to capitalize the balance of the Central Bank, I think that You don’t have any leeway to go on a gradual schedule. So the problem is what is the shock and what is involved in a shock. So that will define 2023. But also, if you do not accompany this shock with structural reform policies that accompany the economy, they can become a Rodrigazo. I think there is room to defuse the bomb before it explodes. Now, it requires a cooperation scheme considering an electoral scenario. Today, what is being done is generating greater damage to the Central Bank. There is a visualization at the end of the tunnel where you have sectors that can generate the necessary dollars for a stabilization program that will generate the bases for sustained growth later.”

Source: Ambito

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