The economic analyst and director of the consulting firm Focus Market, Damián Di Pace, highlighted this Monday the importance of the fiscal and trade surplus for Argentina.
In dialogue with Chain 3Di Pace explained that the fiscal surplus It occurs when the State’s income exceeds its expenses. “Since the new administration entered the government, it has effectively achieved that fiscal surplus,” he stated.
Di Pace explained that this was achieved through the reduction of public spending and the increase in state income from tax collection.
In this context, the analyst said that President Javier Milei will communicate, in the message on the national network that he will give this Monday night, that “twin surpluses a consecutive quartersomething that had not been achieved since the 2003-2008in the government of Néstor Kirchner and the first term of Cristina Fernández de Kirchner.”
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On the other hand, Di Pace also mentioned that tax reforms can be difficult for ordinary citizens to understand. “From macro to micro numbers, there is a distance,” he said.
According to him, if public investment and public consumption are reduced, it is necessary for the private sector intervene to improve economic circumstances.
Furthermore, Di Pace pointed out that any improvement in the economy is conditioned by both macroeconomic factors and the political agenda. He emphasized, in particular, how tax policies affect small businesses and self-employed individuals.
“For the way out of this fall to be a ‘V’, the political agenda has to accompany it. If not, it will be slower. At some point, the economy rebounds, because it falls so much… It would seem that we already experienced the deepest valley in December, January and February. Now we have to see if the economy begins to adjust slowly or more quickly. May is key to see what happens,” he considered.
“From that, we have to see how the salary is recomposed and how the income of Argentines improves. “That is achieved with more economic activity,” he noted.
“The external front, which is where the economy is doing relatively better (agriculture, livestock, mining, energy, oil) is a sector that represents 30 percent of the product. The rest moves in the domestic market, which is 70 percent of the gross product and that is still falling. “It is very difficult to improve income with inflation and a drop in economic activity,” he added.
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Regarding Argentine public universities and their financing currently in political dispute, he said: “It is real that the game exists and falls in real terms. Now, the university was never good. I don’t see that the public university is in danger. This president wants to audit those numbers and it doesn’t seem bad to me.”
Finally, Di Pace commented on labor reform and labor flexibility. According to him, the Argentine labor market “is already quite made flexible a long time ago”, with a high level of informality and private wage growth that cannot keep up with the public sector.
“Under these conditions, will formal employment grow? “Will we continue to lie to retirees that we will give them a better retirement if there is no formal asset that finances the liability,” she asked.
“In Argentina, there are 600 thousand SMEs. If each one took on two employees, we would make a revolution and there would be more than one and a half million jobs in a year,” she said.
“In 2003, there were 3,500 labor lawsuits in the country. In 2023, we close with 144,000. It means that, if there are 600,000 SMEs in Argentina, almost a quarter of them suffered a lawsuit. It is unfeasible,” he concluded.
“Viva la Radio” interview.
