The Economist Alfonso Prat Gay analyzed the current economic situation of the country in a recent interview. The former Minister of Economy of Mauricio Macri reappeared after his counterpart did so Nicolas Dujovne and sowed doubts about a possible improvement in the economy and the “V” recovery. He also warned about unemployment as the limit of the current administration.
“There were experiences in which the fiscal result recovered, but not so much due to a decrease in spending, but rather due to an increase in income, in general with a good economic moment.” However, the two main measures that Javier Milei took, according to Prat Gay, go in the opposite direction to the recomposition of income: “Basically Milei did two things: step on expenses – which is not saving – and give inflation a boost to liquefy expenses that cannot be stepped on.”
“The consequence of the inflationary flash is that income fell in real terms: pensions and salaries of the public and private sector and the real value of the dollar at which it is traded., especially from the exporter. If you take the export dollar of December 9 and adjust it for inflation until today, today’s dollar It is 35% lower than this”, he expressed in dialogue with Luis Novaresio in La Nación+.
History, according to the economist, shows that a significant increase in income is far from occurring. “When you see that panorama you say ‘an economic recovery is needed because in the previous plans of [José Luis] Machinea in the late nineties or [Nicolás] Dujovne in the Macri Government, The recessionary dynamics of spending cuts led to fewer sales, less economic activity, and less revenue.. Since there is less collection, another adjustment in spending has to be made and that leads to a downward spiral,” she remarked.
For the economist, the Argentine economy is “with one more question.” And he explained: “It is that when this vicious circle happens that you enter a terrain that we have not yet entered, but that we could enter, that It is when the slowdown of the economy itself takes the labor market to a sacred place especially for many Milei voters”. That sacred place is that of job loss, according to Prat Gay.
“It’s one thing to say ‘I bench Milei because everything before seemed like a disaster, we have to change, shake up the board and I’ll accompany him even if it’s painful.’ But when an uncle, cousin, brother or father appears who loses his job, you don’t like it as much anymore. I’m not saying it’s happening, but there is a hint”, noted the economist.
“Government He is very triumphalist with the fiscal numbers. I have never seen a national network where a president talks exclusively about fiscal numbers. In any case, that would have been up to the Minister of Economy, but he again underlines this idea or mantra that Milei transfers to the entire management. Stepping on spending is not saving,” he said. And, not without crudeness, he exemplified: “Yesterday I saw a meme that is doing the rounds on Twitter of a very nice photo of a typical middle-class family that says ‘well, I didn’t pay the prepayment, the mortgage, the club and I have savings barbaric so I’m going to treat myself to something.’”
“Obviously something had to be done on the fiscal side because it was unsustainable. But It is also not sustainable to lower pensions and real wages by 35%. There are other expenses that we can discuss, such as the issue with the governors and provinces. Milei has been brave and she has managed to sustain it,” she acknowledged.
The economist reiterated his concern about the sustainability of the economic program: “More than household appliances [motosierra, licuadora] What I wonder is how long this can be sustained over time.” And he answered: “It depends exclusively on the recovery of the economy. That is why the Government’s desperation is to make us all believe that the V is coming, the recovery is very strong; and the anxiety that Milei and her entire team have to heavily advertise some number that seems good.”
In that sense, he recalled the setback that the Minister of Economy, Luis Caputo, and the president himself had with a false account on the social network X that published erroneous data from a supermarket. “For example, this episode that he had with the supermarket bots, which was a fake. They need to show that things work,” he said.
The economist ruled out dollarization, at least in the short term. “With dollarization, so far we are further away than before. Luckily the President does not admit it publicly, but he got away from that axis and debate. He now he talks about coin competition. “Dollarization is not a good idea and it is good that it has been abandoned,” he assured.
Prat Gay took the opportunity to remind Milei that he said one thing and did another: “The whole discussion of dollarization had a budget, and Milei said it so many times ‘I already have the dollars, I got them from I don’t know who, from so-and-so , some funds, and now I can dollarize.’ The main new point since Milei won is that that was not there. He won with a promise of something that did not exist”.
“He had to pivot and adapt to that reality. The reality is very complex because the mandate of society is ‘change all this without political structure, without territorial scope and without resources.‘”, he said and acknowledged that it is an enormous and complex challenge. “We must be fair in analysis and criticism,” she concluded.
Source: Ambito
