The explosive economist Carlos Melconian is concerned about two elements of the economy: the fall of a large percentage of activity and the “berreta” discussion about the decline in inflation. This was said this Sunday on television when speaking about the economic direction of Argentina five months after the arrival of Javier Milei to the presidency.
For the former president of Banco Nación, it is key to know what the floor of the current recession will be and what the rebound is like. “The rebound always comes. Later we will see if it is a V, which I doubt, an L, a U or a J,” he said.
Melconian assured that his comments are not a criticism but that he believes that “we must have a program that has successive steps.”
According to his vision, the Government has to start “show results”, since he pointed out that, As soon as the current administration began, there was as much uncertainty about what was going to happen as hope and he considered that “today the scenario is similar.” Among the definitions that the Executive should give noted: “I am concerned about economic stability, consolidating the medium-term reform, continuing in the search for governability, having a design in the program, showing where one wants to go.”
“If you want to sell potatoes, bananas or apples, you have to have them,” Melconian emphasized. And he said that the problem is that we still do not know what the financial system that is coming in Argentina or what the Government wants with the currency. Likewise, he warned that we still do not know the future exchange rate regime, or how much medium-term inflation is.
On the other hand, it also included the decline in activity as a concern -Industry fell 21.2% in March and construction fell 42.2%. “It is difficult to look forward. What we have here is a deep recession. That is not discussed. What can be discussed is how long it will last,” she sanctioned.
And he considered that this is a situation very similar to that of 2002, and surpasses what happened in 2018. “We are talking about 85% of the economy that is much worse. And the remaining 15%, which are the countryside and extractives, are growing,” Melconian said.
Regarding inflation, he said that “We must tell society that until prices are adjusted, there will always be a feeling and expectation of inflation” and he noted that this is valid for health services, salaries, transportation services, electricity and gas, retirements, etc..
Consequently, he regretted that the ruling party is focusing on reducing inflation to one digit: “The central discussion is not whether inflation is 5% monthly. Fixing inflation means that when you look at the details, salaries, pensions, the value of potatoes, and so on, are equal.” For Melconian, the intention behind this is nothing more than “create an illusion”.
Source: Ambito
