The economist criticized the Argentine tax system, especially the tax on gross income, describing it as extremely harmful to the country. Strong criticism of Luis Caputo’s economic plan.
The government of Javier Milei seems to control the exchange rate gap in recent days by selling foreign currency in the market. CCL dollarHowever, the economist Carlos Melconian offered an analysis on how the exchange rate restriction could be eliminated and warned about the fragility of the decline in inflation.
Melconian explained that the challenge nor only involves the removal of the clampbut a comprehensive review of the exchange rate regime and the dollar value. “It is not possible to remove restrictions in one fell swoop; this must be done gradually,” Melconian said, alluding to market expectations of possible immediate changes.
Melconian, who served as president of Banco Nación, also highlighted the need to modify the exchange rate regime and evaluate the value of the dollar once the exchange rate “blend” is eliminated.
According to him, this transition requires an agreement with international organizations, since freeing and floating the dollar without an adequate strategy would be inappropriate. In July, the Government adjusted its approach, moving from an exit with a floating dollar to seeking a solution with an exchange rate anchorwhich could be supported by funds from the International Monetary Fund (IMF) or other lending agencies, he said in an interview on Radio Rivadavia.
Recommendations for the economic team
Regarding the recommendations for Minister Luis Caputo, Melconian suggested that Argentina should emulate some aspects of Paraguay’s macroeconomic stabilityespecially with regard to taxation and the exchange rate regime. He stressed that a healthy fiscal policy and controlled debt can reduce country risk and increase confidence in the economy.
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Argentinian News
The economist also criticized the Argentine tax system, especially the Gross Income Tax, calling it extremely damaging to the country. “Argentina has a disorganized tax system, and a comprehensive reform is needed to address demands for tax reductions across all sectors,” he added.
Finally, Melconian addressed the issue of inflation, one of the main challenges facing the Government. Despite efforts to reduce it, he warned that fiscal numbers are unlikely to remain as in the first half, describing the situation as a “tsunami”. This context led to difficulties in maintaining the decrease of Consumer’s price index (CPI) in the future.
Source: Ambito
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