For the expert, the elimination of the exchange rate requires a gradual and prudent approach to avoid economic and social risks, prioritizing stability and strengthening the country’s reserves.
Ricardo Arriazuone of the economists closest to Javier Milei, addressed a pending issue of the Government: the exchange rate. In recent statements, he also assured that if the Government follows its economic plan precisely, it could achieve positive results and quickly dispel social concerns.
And the government of Javier Milei is advancing its plan to eliminate the exchange rate in 2025, supported by a context of slowing inflation and stability of the dollar, with an exchange gap close to 10%. According to the president, the measure could be implemented sooner if the necessary external support is provided: “If we have external support, we will solve it sooner,” he assured.
For his part, the Minister of Economy, Luis Caputo, highlighted that current conditions provide room for the elimination to be effective and orderly. However, Arriazu warned about the risks of rushing this decision. “Argentina cannot afford to make mistakes. It cannot be one step forward and one step behind; we only have to do it when we have confidence and security,” he stated.
Arriazu also highlighted the dangers associated with premature implementation, recalling that, at the end of last year, the country faced negative net reserves of US$11 billion and unpaid import commitments of US$40 billion. “I hate the stocks, but I hate much more the social collapse that would occur if it was removed at the wrong time. We would have had automatic hyperinflation“said the economist.
The government’s gradual approach is seen as key, in line with the improvement of indicators such as the reduction of country risk, which currently stands at close to 700 basis points. This, according to Milei, facilitates the conditions to definitively eliminate this restriction.
The two councils for the Arriazu Government
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.”
In addition, he estimated economic growth of 5.2% for next year, with annual inflation around 20%, in line with the Government’s postulates.
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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.
Source: Ambito
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