In radio statements, Castiñeira He assured today that “macroeconomically speaking, Argentina has already killed inflation” and also predicted the end of phase 2 of the economic plan, which will pave the way for lifting the exchange rate trap.
Javier Milei’s advisor spoke about the end of the exchange rate
In dialogue with Radio Rivadavia, the economist explained that at a macroeconomic level “what we are seeing is how the inflationary tank of the silver plan is depleted”, since after the assumption of Milei “the state was put in cash and thanks to that the BCRA stopped broadcasting”, so “more pesos are not being permanently created”.
Along these lines, Milei’s advisor estimated that “this stage of phase 2 of what was to wait for the inflation tank to run out is in its final stage, given that the gap is already entering less than double digits, we are of the 10% down.”
In this way, according to Castiñeira, “phase 2 has entered the final stage that leaves you at the doorstep for the liberation of the exchange market” indicating that “they will not be able to run against the dollar because there will be no pesos.”
However, he specified that “the market sets the timing because it is when the private sector finished exhausting its surplus pesos” and insisted that “the inflationary tank is going to be exhausted when the gap goes to lower levels.”
He also stated that “the pesos will be well financing the level of activity, the credit, the investments,” so citizens “will not be thinking about the dollar because they will get more return from the peso invested in Argentina than from go get the dollar and see where they put it.
Inflation, the Government’s obsession
Regarding the outlook for inflation, he noted that “general inflation may remain between 2.5% and 2.7% this month,” since “the monthly devaluation of 2% puts a floor on inflation.” and indicated that “surely in the coming months we will continue above 2% and below 3% and in January it is very likely that, according to the president’s words, the devaluation would be lowered to 1%, that being the floor and he himself “He said that when three months have passed with inflation closer to 1%, this is the signal that will allow the liberation of the exchange market.”
When referring to the estimates of economists who expected that the CPI would take time to break the 4% barrier, he questioned that “economists in Argentina in general are bad in essence, they can talk to you about multi-causal inflation.”
“What they do is economic shamanism. They are people who do not understand basic topics in economics manuals,” he added.
What’s coming: the Government’s projections for 2025
In this framework, he projected: “What we are going to see from the rebound in 2025, the economy will continue to grow in 2026 and 2027 because now savings connect with investment, while before the savings were all sucked up by the State to finance the deficit”.
However, he acknowledged that “it may be that not all sectors have started at the same time, but in no sector does it indicate that the floor has not been touched and they are all already with an incipient rebound in the level of activity, which is going to be very widespread in 2025”.
Source: Ambito
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