The Government should take advantage of the period of stability to undertake an anti-cyclical fund and structural reforms that go against privileges, the economist recommended. Ricardo Arriazu, one of the specialists heard by President Javier Milei.
Arriazu said that “In neither of the other two periods of stability, such as the Austral plan and the Convertibility, were the anti-cyclical funds made, nor were the structural reforms made. Let’s hope that this time we will do them.”
As for the exchange ratecoincided with the government’s strategy of gradually withdrawing it.
“I hate the stocks, but I hate much more the social collapse that would occur if it is removed at the wrong time. With US$40,000 million in unpaid imports that there were US$11,000 million in negative net reserves last December, if “If you had removed the stocks and put in place the float, we would have had automatic hyperinflation,” he noted.
He said he was a supporter of “take out the trap little by little. “Argentina cannot afford to make mistakes, it cannot be one step forward, one step back, we only have to do it when we have confidence and security.”
In addition, he estimated economic growth of 5.2% for next year, with annual inflation around 20%, in line with the Government’s postulates.
According to the economist, The bottom of activity occurred between March and April, while the largest drop in consumption occurred in June.
Although he congratulated the Government for having stabilized the macroeconomic situation, he said that now is the time to grow and that several reforms are needed to achieve this.
He maintained that “the recovery occurred at the right time. The bottom of activity was between March and April for GDP, and in June for consumption. Towards the end of the year we will have year-on-year growth. Investment is beginning to rise, But it is not enough. Now comes the hard stage of structural reforms, where privileges are touched. That is where people are going to start protesting and there are going to be a lot of complaints, but the country has no alternative but to do so. within the framework of a meeting organized by the Chamber Franco Argentina.
He argued that “in order for inflation to continue falling, the devaluation rate must be reduced, something that the President has already announced,” and estimated a crawling peg rate of 1.5% monthly for next year.
He explained that even with the growth projected for 2025, activity will be at the same level as at the beginning of 2023.
“The only thing we did is a rebound. Then comes the growth stage. To grow, we must take advantage of all the resources that Argentina has and the advantages that the world gives us at this moment. Argentina has energy resources 13 times the GDP. We can multiply production by four, export US$30 billion by 2030. Argentina has 70% of the Andes Mountains. It is impossible for all the minerals to be on the other side. copper and has many silver reserves in Chubut. We also have agriculture, the knowledge industry and who knows what other things that are covered by all Argentine regulations,” he noted.
He pointed out that the country “has already had these opportunities many times and always due to lack of common sense we have wasted them.”
He stressed that “this time we started well”, since “the recovery is much faster than thought” and that inflation also fell faster than believed.
“I expected 140% for this year, when the IMF said 250%, and it will end at 120%. Next year our forecast is 20% inflation,” he projected.
“Argentina has to restore macroeconomic balances to avoid major crises and eliminate the famous Argentine cost so that it can fully develop its capacity,” he said.
Source: Ambito
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