The economist and member of the president’s advisory group Javier Milei, Fausto Spotornoassured that the economic program carried out by the Minister of Economy Luis Caputo is “of Transition” to organize the public accounts and that next year it will be necessary another “long term”. Furthermore, he anticipated that this year it will be very difficult for the Government to lift the exchange rate and gave his opinion on the coexistence that could begin shortly between the head of the Treasury Palace and Federico Sturzeneggerdesignated to join the cabinet in the short term.
“I see the picture of the economy well. This is a clearly transitional economic program including a part of the Bases law. It seems to me that anyone who thinks that this is a success and changes Argentina from end to end would say no, they are lacking. It enables things like the RIGI, which can be tools that can work but you have to see how they are executed,” said the economist from the consulting firm. Orlando J. Ferreres.
“The key to the entire program is the ordering of the fiscal deficit. The idea of having a fiscal adjustment is part of any economic plan today in Argentina, it is our Achilles heel, all our crises were fiscal in some way. If the Government manages to sustain the fiscal surplus, the program will be successful in this first parte, in ordering the accounts,” he mentioned in dialogue with Radio with you.
“The program is well planned. I understand it as a transition. To change Argentina definitely takes many years, possibly a couple of presidents. But it is a transition program that until now is a program to organize the economy after how last year ended, with high inflation, without the capacity for growth. It’s not skepticism, but parts are missing. The program is good but it does not solve all the problems,” warned Spotorno.
“This is a clearly transitional economic program including a part of the Bases law. It seems to me that anyone who thinks that this is a success and changes Argentina from end to end would say no, they are missing it” (Spotorno)
“Inflation is number one and it is the reason why Milei won. The show definitely attacks that issue. But when you start to look at the economy, there is still a distortion of relative prices that I believe will be resolved and a deeper one, which is the lack of economic growth“We have been without growth for ten years,” he added.
“Although this program points to those problems, today you are in phase 1 of the transition program, which is to fix the fiscal deficit, inflationWe don’t know when we get out of the trap and without going out you don’t have economic growth. It’s not that leaving the stocks you’ll have it, but with the stocks you won’t have them. There are many phases missing from this program. Caputo’s program is a transition to order the fiscal, inflation and monetary matters and We will have to think about a more long-term program next year“, considered the member of the group of economists who advise the President of the Nation on different issues. That circle is headed by Demian ReidHe, former vice president of the Central Bank, close to Sturzenegger and who is part of the small presidential delegation in the G7.
Asked if this new program should be by Caputo, Spotorno responded: “I don’t know, but it is true that Milei has another top economist thinking about deregulation and long-term things that Sturzenegger is. We don’t know how that will work in the future. You have to understand Caputo at this moment. If six years ago you told me how inflation is resolved, I knew that it was going to be a very strong pitched battle for any minister, today everything seems to be going better, and one could say that Caputo came a large part of the way, “he said.
But he clarified: “Inflation cannot be fought by acting partially or with a Ministry of Economy that dedicates a little time to it. Whenever we have had effective anti-inflationary programs it was when all economic policy was aimed at that. On the one hand, Caputo continues with the issue of inflation, because 4.2% is still a high monthly inflation, We can’t say ‘I already won’ we have to keep going hard. You can’t take tools from Caputo who is on the front lines. But at some point in the future if we manage to move to a relatively low ratio, below 10% annually, that is, the inflation of the world, then you have to focus on more complex issues, regulatory, competitivenesswhich is what all economic ministers in the world do,” said the OJF economist.
“Milei has another top economist thinking about deregulation and long-term things, which is Sturzenegger. We don’t know how that (the relationship with Caputo) will work in the future” (Spotorno)
“It is true that These economic mixes are not recommended. The reason as an economist is easily seen, there are two types of policy, monetary and fiscal, That many put their hands on that is a problem. One only has to be handling the baton. The president is an economist so I don’t know at the end of the day if you have an economy minister in the presidency with different undersecretaries. The president has very clear ideas,” Spotorno continued. “My feeling is that Caputo came with an initial economic plan to get out of all the short-term problems in quotes, fiscal, monetary, balance of the BCRA and that Then comes a more mile-based program“This purer program seems to me to require more from Congress than what the government can execute,” he said.
“Caputo does not differ much from Milei’s ideas, in fact there is a good relationship of Caputo and Sturzenegger, the issue is not about the ideas but about the execution, the ideas are from Milei, then among the interpreters you have Reidel, Sturzenegger. The council (advisor) is more to explain ideas, what we are seeing,” he defined.
Regarding the current state of the economic program, asked if he sees the next steps that are coming as “hazy”, he replied: “It is not that it is hazy but you are entering a stage of the program that is much more mature, delicate. Now you’re starting to see the problems with the short sheet. Economic activity in our measurement shows two months of recovery. In May he recovers again. And although the liquidation of agriculture is not bad, – possibly in June it will begin to be better than the historical average – the BCRA cannot accumulate reserves because the Government is releasing dollars for imports, which is why an economic recovery is seen. That’s a short sheet example”, he warned.
“The analysis of all the recessions of the last 30 years, excluding the violent one of 2001 but including the Covid one, all of them have the shape of a ‘smile’, a stretched U. On average, in all recessions, the entire cycle lasts 18 months, from the beginning until you recover everything you lost and more or less between month 7 and 9 you begin to recover. All recessions are similar. This one is not very different from the rest,” he considered. And finally he anticipated, regarding the release from the stocks: “I don’t think they come out this year. If it is before the end of the year it is two days before. The stocks have one thing, which is the PAIS tax, which is more difficult to get out, it falls legally at the end of the year. “It does not mean that restrictions will be lifted soon,” he concluded.
