As has already happened on several occasions, during other administrations that I define as the “4M” (Martínez de Hoz, Menem, Macri and Milei), currently there is a large gap between the official discourse and the reality that the majority lives every day. of the citizens.
Contrary to what government officials transmit, macroeconomic data do not indicate a recovery, although in his recent public appearances President Javier Milei utters encouraging words about the direction of the Argentine economy and society. “Little by little the gears of this rusty machinery that we had for economy are beginning to be oiled,” he declared. “We have laid the foundations for the growth and freedom of Argentines,” he noted in another of his interventions. At the same time, he never fails to mention the axis on which all the decisions of his government management revolve: “we put a lock on the fiscal balance and swallowed the key.”
According to official statistics (Indec), economic activity decreased by 3.3% in September compared to the same month last year and 0.3% compared to the previous month. With these figures, production is still at lower levels than those recorded when the libertarian administration took over. Key sectors such as industry, commerce and construction continue to show negative year-on-year values. Furthermore, if we removed the agricultural sector, which had a good performance when compared to the drought it went through last year, the economy would have fallen by close to 5% year-on-year in the accumulated until September.
Another indicator that turns on a warning light is the result of the current exchange account, which reflects the outflow of foreign currency from exports less imports of goods and services, and net interest payments. In October of this year it was in deficit for the fifth consecutive month. It should be noted that the recent asset regularization regime (commonly called laundering), which resulted in an income of foreign currency (in exchange for forgiveness for those who, at a minimum, evaded taxes – and with a very low tax cost -) made it possible to mitigate this result on the exchange market.
This negative balance is mainly explained by interest payments from the public and private sectors, services (highlighting payments made in travel, freight, business services and telecommunications) and a small positive balance in the merchandise account.
As in the analysis of economic activity, the deficit would have been considerably higher if it had not been for the contribution of exports from the oilseed and cereal sector, which contributed significantly to reducing the negative balance: evidence of the poor diversification of the national export structure and the low level of the multilateral real exchange rate (which measures our country’s competition in the external sector).
A situation that can hardly be reversed if the policies of this government continue, a management whose ideology involves rejecting any type of State intervention in the economy and thus hinders the possibilities of development of the industry or other sectors. There is plenty of experience on the part of developed countries that managed to advance based on the state support that their industrial sectors, among others, received.
Finally, an aspect to take into account is the financing of this Current Account deficit, the only possibility of which lies in being able to cover said negative result with the reduction of International Reserves or with external debt.
It is logical that those who placed their trust in a candidate, almost a year ago, continue to consider that a large part of the problem is the “inheritance received.” But, in the short or medium term, this model leads us to situations that we already suffered during the “4M” efforts. It would be positive if in the future the space that is not in accordance with current policies could be expanded, and majorities could be consolidated (even if momentary, for specific issues) that limit the extraordinary powers (converted into ordinary ones) that the Executive Branch exhibits, among many others, with the rejection of the parliamentary treatment of the 2025 Budget or the use of vetoes to stop the laws approved by the National Congress.
National Deputy Union for the Homeland. President Solidarity Party
Source: Ambito
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