The foundation Think, the think tank of PRO, published a report on the occasion of the first year of government of Javier Milei in which they highlighted the policies implemented to “dismantle the Kirchnerist bomb” and they assured that, despite the impact it had on the economy, society “banking”. They also evaluated the performance of the party that leads Mauricio Macri.
The analysis released this Tuesday began by focusing on the fact that the starting point from which the management Milei was “the country in crisis that Alberto, Cristina left and “Massa.” Along these lines, they listed poverty “at record levels,” an economy “on the verge of hyperinflation” and in decline, the retraction of salaries and “waste” in public accounts.
They also mentioned the negative level of the reserves of the BCRA, which they described as the “lowest since 2006), the 32% increase in debt and “an economy isolated from the world.” “Added to this is a history that does not help: in the last 80 years we had a fiscal deficit in 75 years, inflation greater than 5% in 69 years, an economic recession in 28 years”they expressed.
The report ensures that the measures applied by Milei they defused the bomb “successfully”. “October inflation was the lowest in 34 months,” they highlighted and added that “it is the first time it has broken through the 3% floor since November 2021.” In addition, the country risk reached 800 points “for the first time in the last 5 years” and has accumulated a drop of more than 50% since January 2024.
The former president participated in the analysis Mauricio Macri and his former Ministers of Economy, Hernan Lacunza and Nicolás Dujovne; the former head of the BCRA, Guido Sandleris the economist and PRO deputy, Luciano Laspina.
For Lacunza, the success of the current administration lies, in part, in the fact that it managed to remove the probability of hyperinflation, a corralito and default. “That this catastrophic language today is not part of the public or private conversation is not due to an unexpected atmospheric change, but rather to a popular vote that understood that the silver plans, frozen rates and backward dollars were the cause of inflation of more than 200%. annually and poverty bordering on 50%”he expressed.
The economist assured that it was also due to the fact that the government “subordinated his most controversial monetary ideas (“dollarization”) and invested his initial political capital in a bold fiscal plan consistent with his campaign promise (“chainsaw”) even in an inexorably recessive context (consumption sustained by subsidies and silverware plans was artificial)”.
Regarding next year, he did not hesitate to assert that the prospects “are higher than those of 2024.” And he assured: “Activity will rebound between 3% and 5% and inflation will range between 20% and 40%.” Although he warned that “As long as there are stocks, there will not be a “normal” climate for extended investment and the expansion will be more rebound than growth.”.
Sandleris stated that the Argentine economy “is better today than a year ago” and agreed with Lacunza in pointing out that Milei’s great achievement “is having managed to deactivate the complex bomb that Kirchnerist populism had left once again.” The strategy: a “very strong fiscal adjustment”, “exchange/monetary pragmatism”, the success of money laundering and “a fourth unexpected fact that has to do with the people’s reaction to the economic program.”
In any case, he warned about the exchange scheme: “Hand in hand with a inflation “which has run much faster than the depreciation rates of the exchange rates (official and parallel). Argentina has become significantly more expensive in dollars this year.”
Then the report of the think foundation raised the question about the sectors that paid the adjustment of Milei. In that sense, they listed: retired (28%), public works (24%), salaries and universities (15%), subsidies (13%), social plans (12%) and transfers to provinces (8%).
Next, Nicolas Dujovne highlighted the sharp cut in public spending as “the great achievement of 2024” to achieve the primary surplus and financial balance in the public accounts of the National Government: “The decrease in public spending in 2024, to a level of 32% of GDP puts us much closer to the area in which “It can be financed by taxes and no longer by net issuance of debt or monetary expansion, resuming the effort carried out between 2016 and 2019.”
For the former Minister of Economy, the challenge he has Milei Going forward is “to continue consolidating the decrease in spending and improving the quality of our collection.” In that sense, he proposed resuming the discussion of the 2017 tax reform “which attacked Gross Income, Business Profits, labor charges and debits and credits, among others.” In any case, he assured that Argentina is “on the right path” and asked to consolidate and improve “this great first step.”
In its eighth report, entitled “Fast and Furious”the vision of the Pensar Foundation economists on national management, the role of the PRO in Congress and the government’s pending challenges was developed. The document analyzes the persistent decline in inflation, the consolidation of the fiscal surplus, the fall in country risk and the salary recovery as some of the reasons that explain the high level of approval that the President maintains, despite leading the largest adjustment in the history of the country.
Highlights of Milei’s first year
- Dismantling the Kirchnerist bomb
- The zero deficit is here to stay
- The order still hurts and we all pay for it
- Despite everything, the banking society
- Deregulation, at the forefront
The role of PRO legislators
- The Executive Branch projects that we support
- The projects presented by our block
- The projects that we decide not to accompany
- The management of our governors and mayors
- The ordering of the accounts
- Austerity as state policy
- Beyond the macro
The pending challenges according to the Pensar Foundation
- More chainsaw against caste and repeal of privileges
- Greater strengthening of republican institutions
- Economic reforms that support growth
- More proposals to face the educational emergency
- Reactivation and search for investments for key infrastructure works
Source: Ambito
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