Different economists and even the International Monetary Fund have been raising the need to have positive interest rates. Milei responded to these criticisms by rescuing his policy and pointing out that “What counts is the arbitrage of the dollar rate.”
The head of state began his speech by referring to the difficult situation he had to face when taking charge of the Government with deficits both in the Treasury and in the external sector, without reserves, with excess pesos in the economy and with wholesale inflation of 17,000% annually, among other imbalances.
He then justified the application of a shock policy since, he explained, “there was no room for gradualism.”
Milei specified that his stabilization program was based on fiscal policy (application of the chainsaw and blender), monetary policy (blender) to absorb the excess pesos and exchange rate policy through exchange rate adjustment.
“These policies gave rise to an unprecedented adjustment of 13 points of GDP, resulting from a correction of 7 points in the Treasury deficit and another 6 points of the quasi-fiscal (step from 10% to 4% of GDP)”Milei asserted.
In addition to the recovery of reserves, the President highlighted the slowdown in inflation, which went from 54% monthly in December to 5.4% in March. Meanwhile, the retailer went from a peak of 25% at the end of the year to around 10% and in single digits if the effect of the rearrangement of certain relative prices is discounted.
Javier Milei refuted criticism
The head of state refuted criticism regarding the lack of an economic plan by pointing out that he is carrying out “a comprehensive program”. Faithful to his liberal ideas, he rejected the sectoral policies known as “pick the winners” (choosing winners), that is, benefiting or promoting certain activities from the State, “such as the policies that Asian countries applied at the time.”
In the world, there is a resurgence of industrial promotion policies that were recently criticized by the IMF.
In relation to income policy, the President was emphatic in pointing out that “prices are sacred” reaffirming its respect for the freedom of markets. This statement may sound contradictory with the recent measure applied with prepaid medicine, but in the presidential environment, he explains it as a way to stop “abusive pricing practices based on the dominant position that these companies have”. However, the concentration of the offer and the difficulty of users when changing providers was known.
DNU and Law Bases
In his speech he referred to the expectations of the population, which shows growing optimism for the future of the economy.
In this regard, a recent Synposis survey shows that 52% of respondents expect the economy to be better within a year, which is the highest level of favorable responses in the last eight years.
In defending their policies, Milei asserted that they decided “attack the causes of the fiscal imbalance through two instruments: DNU 70 and the Base Law.” He reiterated that his objective is for the country to move towards being an economy as developed as Ireland’s.
Trusting that in the mid-term elections the people will ratify their policies and, with this endorsement, Milei hopes to carry out more than 3,000 structural reforms.
Once the speech is over, the head of state plans to return to Buenos Aires.
Milei arrived in the city of Bariloche last night accompanied by his sister Karina, spokesperson Manuel Adorni, the presidential doctor and security personnel.
Source: Ambito
