The economist Marina Dal Pogetto He pointed out that the current economic scheme is largely based on an adjustment that falls on the income of the population and warned about a financial scenario that favors “a loop” between the interest rate and the price of the dollar with an open end.
“The adjustment variable that justifies the fiscal adjustment and the change in relative prices is placed on income. The adjustment is sustained as long as society supports it. The million-dollar question is how far society is banking on the adjustment“said the owner of the consulting firm Eco Go.
In dialogue with Radio Rivadavia, Dal Poggetto explained that “the Government plays in a context of exchange delay and loss of income that for now society tolerates because there is nothing on the other side. There are (Javier) Milei and Cristina (Kirchner) and in the middle are the orphans of the center”.
On this basis he explained: “The Government is betting on a good election in 2025 in which it is clear ‘that populism is not returning again’ and there we will have a financial program.”
Regarding this issue, he warned about a “carry trade” scenario that allows a profit for investors and helps the Government to maintain calm, but at the cost of increasing the National Treasury debt measured in dollars.
“Economy validates an interest rate of 4% with a crawl (devaluation) of 2%, which in annualized terms gives you 26%, it is a party,” he stressed, but immediately warned: “It is a party as long as everything remains still “.
Dal Poggetto stated that “the interest rate that (the Treasury) is paying is an interest rate that, if the budget’s inflation projections (18%) were met – the 1.4% average monthly inflation for the next year – and validating a rate of 4%, it becomes explosive.
Dal Poggetto indicated that: “The novelty is that the laundering dollars begin to refinance the private sector and that allows the BCRA, which has not been buying dollars since June, to start buying. This adds to the reduction in Country Risk and forms a stable short-term outlook. The question is how do you connect with a scheme in which the exchange rate begins to generate competitiveness problems. The laundering dollars lengthen your carry trade.
The economist pointed out as a result of this scenario that, although fiscal policy is “contractive”, “credit is very expansive” and seeks to make up for the drop in consumption.
Regarding October inflation, he said that the projections of the consulting firm Eco Go point to 3.1%.
“The economy has bottomed out and is beginning to recover a little at the margin in a context in which fiscal policy continues to be contractionary, but credit policy is beginning to be extraordinarily expansive,” he insisted.
Source: Ambito
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