The economist and former Minister of Economy, Gabriel Rubinstein, He repaired to the agreement of the administration of Javier Milei with the International Monetary Fund (IMF) ensuring that “it will have many restrictions for the use of funds” so “we will have to live with a high risk of exchange and devaluation volatility.”
In statements to the Argentine News AgencyRubinstein referred to the implications of a new understanding between Argentina and the IMF that would include more resources to strengthen the reserves of the Central Bank, pointing out that “when funds are granted very much to maturities, it gives an idea that they are fresh funds, since for a long time we do not have to pay the IMF.”
In that aspect, he stressed that the agency “is giving us a sample of confidence in advancing so much money” and recalled that in his experience in the economic portfolio with Sergio Massa, “We had the reverse situation, we first paid and then gave us the funds.”
In this context, he said that “it is good that they give you the funds in advance, it gives you slack, but it does not mean that you can easily use them because the agreement will have many restrictions for the use of these funds”, indicating that “the main one, almost with certainty, is that the IMF will not let the bandages in the change market at a value that they consider very late, which is the current situation. “
Rubinstein’s warning about exchange runs
On this aspect, the economist considered that “that is a problem because if you got to have runs, a very large fire, you have the math unloading to face it” and said that “that is a problem that will be left, that this agreement will not solve it”, so it warned that “we will have to live with a high risk of exchange volatility and devaluation that will continue in the economy time”.
When referring to the walk of the economy, he said that he played a background towards April-May, and since then he has shown signs of recovery ensuring that “In recent months it gives us that it is growing 0.3%, 0.4%, 0.5%each month, which recovered everything lost“And he said that” it was an exaggerated fall at the time. “
What does Rubinstein expect from the economy in 2025
With this context, he predicted that the economy in 2025 will grow 6% ensuring that “it is a year of great rebound and the end of 2024 left a positive drag.” However, he pointed out that “beyond the rebound we will have to see if Argentina has conditions to grow, if it will only be mining and cow,” indicating that “it is an open matter but the important thing is that the rebound is quite strong.”
In relation to inflation, Rubinstein He estimated that “the conditions are given to continue down but slower than And what the government would like “and stressed that the disinflationary process” is an achievement of the government but is now costing “, although it expects that” over time it will reach 1% monthly and with a little more time to 0.5% monthly. “
With regard to the fiscal adjustment that the government carried out, he said that “it was 5 points of the GDP and is decreasing to 4 and peak now, but the 10% who speak of the quasifiscal never existed” and acknowledged that “it had to be done, it is what I had proposed to Massa at the time and it is what Milei finally did, achieving a primary surplus of 1.8 last year and aims to be 1.3 year”.
In this line, he stressed that “I consider it valuable because it was a need of Argentina, which had no dollarsno financing in pesos or in dollars, so there was no chance to avoid a fiscal adjustment, “noting that” at that point he did what had to be done, then we can discuss who pays the burden of that adjustment, how much retirees, how much public works, how much this, how much this is. “
Source: Ambito
