They began economic measures with the Caputo package and other transcendental ones. This is what was expected within the famous 100 days with the support of society for the start of management. It should be noted that it is not fiscal gradualism like that of Macri and Prat Gay. We want a primary surplus and close the fiscal deficit of 5 points of GDP, It was only done in the Frondizi government in 1959.
The adjustment of Lopez Murphy The reason for its departure was 0.7% of GDP and for now there are no pro-growth and investment measures, the bet is that the adjustment influences the markets and that stocks, bonds, investment climate and country risk improve. He growth at first by rebound from an economy that grew zero with the last Kirchnerist government can come in 2025.
On the other hand, the REM perceives a 2% recession by 2024 and It would seem that it will be greater due to the fall in income, the result of very high inflation due to devaluation, due to inertia, due to the balance of relative prices (e.g. Tariffs) and among other factors. You notice a change of environment with the arrival of orthodoxy While the Fund approves, a new program will be put together that extends payment terms with goals that it seems there is a desire to meet.
It was surprising that the Leliqs theme is not a priority as proposed by President Milei and the dollarization It is not on the agenda for now, perhaps the debate will come later when it partially stabilizes.
Regarding measures, Public works is controversial, it sounds strange that the Nation does not commit funds to finance and unemployment can be generated. Subsidies will gradually decrease with a social sense but with the intention of closing the imbalance that represents more than 2 points of GDP. The reduction of ministries is not significant for the rationalization of public spendingWe will have to see what happens with retirements, which had been falling sharply under Massa due to the liquefaction due to high inflation.
Caputo points out that the intention is maintain purchasing power, Will this be the case for the first item of public spending? The front of public companies with management inefficiencies has not yet appeared on the short-term agenda; perhaps it will be in another package of measures. There does not appear to be a comprehensive stabilization plan and there was a lack of time to prepare it. Lacunza, Laspina and Melconian advanced further in this, and Sturzenegger’s work of surveying the digest of laws to propose decisions in line with the reform of the State seems interesting.
The measure of dollar at 800 was surprising, less was expected. He is a overshooting knowing that transfer inflation is going to eat into the real exchange rate. We want an exchange anchor with the crawling peg at 2% monthly added to the fiscal anchor that is the strong bet of the Executive. The gap fell sharply and the parallels rose little, it is a good sign and if the confidence continues, it can converge to the exchange unification con exit from the stocks. It favors exporters and with the country tax it stops imports. While a surplus of $15 billion is expected by 2024, this will strengthen reserves and lower exchange tensions.
Cut the discretionary transfers to provinces is a strong measure. The provinces are not bad on the fiscal front, some will suffer more with this measure and it seems that the income tax is returning, a classic tax in the modern economy that populism questioned with Massa’s measure. This favors the provinces. AUH and Alimentar Card offset income, consumption will fall and drag down the GDP. There is hope with money laundering and the moratorium to boost the financial market and investment. A mechanism was faced to address the debt with suppliers, a central problem of many companies linked to the commercial dollar so delayed as a result of the distorting stocks.
In short, they are measures to mark the court and that the opposition front is already questioning. Governance is affected and the other thing to overcome is Parliament, can the omnibus law with a notable Milei minority in the chambers?
The 8 stabilization plans failed. Convertibility could be an exception but many are critical of its long final recession, indebtedness and record of recession in its traumatic exit. The recurring failure fuels the idea not shared by the profession of dollarizing, we must continue monitoring the environment. Exemplary measures are desirable so that there is no feeling that the adjustment falls on those with lower incomes.
The Central Bank is being set up, there is coordination with Economy and it is key, as Keynes said, persuasion and communication. We had it with Alfonsín at the beginning of the Austral and with Cavallo Menem. Companies must manage with very high inflation in the summer. Difficulty in setting prices, managing working capital, coordinating financial coverage, maintaining the work environment in the face of uncertainty. It is obvious that the effort makes sense if the change is to organize the macro. Structural reforms and consensus on the direction are needed so that another populist cycle that preys on well-being due to the poverty generated does not return.
The challenge requires leadership and unity in companies. He State in the face of crisis It cannot be absent and it is the modality of modern capitalism that has generated surprising levels of quality of life. He failure of the Argentine economy Since the 70s it has been an opportunity to go out more intelligently towards the goal of greater private and public productivity.
Source: Ambito
