The former Minister of Economy, Hernan Lacunza “He explained why he believes that the Government should rethink economic policy and its vision of economic growth.”The Government has already begun to warn that the savings for the first quarter will not be extended because it has to pay for electricity. But the important thing is the change of bias or direction in politics”, said.
“This thing that was done that I can spend everything and then see, it doesn’t work. People are left out when the accounts don’t close,” he concluded.
Doubts about the fiscal surplus
Lacunza spoke about the sayings of Cristina Kirchner in Quilmes, from where he discredited the fact that the Government had reached a fiscal surplus as Milei announced on the national network. In that sense, Lacunza stated:
“Beyond Cristina’s political chicanery, and even though the President gets angry, there is talk of a calculator or chainsaw, where the 30% is chainsaw, that is, adjustment in permanent spending such as public works and the cut to transfers to the provinces. Then there is a 60% blender because I do not correct important expenses such as public salaries and pensions for inflation,” he indicated in an interview on LN+.
“The first thing I can cut back on is not fixing the bathroom, I can live with that, but you can’t live without sending money to my mother-in-law or my daughter. “The quality of life went down,” he said and marked the third component that comprises the last 10% of the adjustment, which he called freezerbut that was not taken into account when talking about surplus: “The Cammesa subsidy was not paid in the first quarter. That data was not counted. If it counts, you don’t have a surplus, you have a small deficit”.
On another line, Lacunza proposed that instead of a “V” there could be an asymmetrical “U” while he warned that an “L” must be avoided, that is, an acute and prolonged economic recession.
“The ‘V’ bounce is not going to happen,” analyzed Lacunza. “What we are experiencing is more of a crisis of insufficient demand. These are more parsimonious, more asymmetrical “U” shaped, like the sportswear brand, which falls a lot and then bounces back little by little,” he indicated and continued: “The ‘V’ rebound occurs in a supply crisis as occurred with the pandemic, where you close businesses and factories, and then you open but with all the installed capacity and the income that was maintained.”
In that sense, the economist warned about the danger of the economy not recovering. “The risk to avoid is that it is an ‘L’, a fall. And you still can’t see the floor. According to the available March and preliminary April numbers, March was even worse than February, so there is no such thing as a rebound yet. Many sectors fall to double digits”he evaluated.
The Government’s economic policy, according to Hernán Lacunza
In another order, Lacunza explained that the method that Javier Milei chose to control inflation was “the severe fiscal adjustment, the non-validation with monetary issue and the exchange delay”
“Inflation needs to go down, which is the objective of first order and almost exclusive that the Government has, which is healthy and good because inflation kills, but we must keep in mind that the economy is a system, and that if you focus on a single objective, then you neglect the others,” he said and added: “The recession is very acute. , and The risk is that low inflation will be achieved, but at the cost of an incipient and manageable exchange rate delay, for now, but dangerous in five months. and less manageable, with an economy that does not end up recovering. At that time, the political asset that the street supports can begin to erode.”
Source: Ambito
