In the midst of the internment that makes Together for Change tremble due to the holding of elections in the Municipality, the former head of the Central Bank, Guido Sandleris, slipped some details on the stabilization plan prepared by the opposition: it must be different from the “gradualism” of former president Mauricio Macri e start with a sharp adjustment in government spendingBut maintain some of the exchange controls.
“The new administration has to be very aggressive from the start on tax issues and a lot prudent in money, the opposite of the strategy that existed with Mauricio Macri. At that time the the fiscal approach has been gradual Due to political restrictions, we were a minority in Congress and the concern that until Macri there had never been a president who was not a Peronist who finished his mandate”, said the economist, now close to Horacio Rodríguez Larreta .
Sandleris spoke out against Kirchnerism and the management of Alberto Fernández before an audience of students at the Georgetown Americas Institute, in Washington. “We need a new stabilization program and Kirchner’s idea that spending generates growth doesn’t work“shot during speech”Can Argentina achieve economic stability and inclusive growth?“, moderated by Alexander Wernerformer director for the IMF region.
After going through the Macrist management, in which the trap has been lifted and ended up reinstating To deal with a series of devaluations with deposit outflows, Sandleris proposed changes for the future: “The economy can’t run on regulations every month, but it doesn’t mean getting rid of all the controlssome will be needed in the beginning because there are many weights, but the Frankenstein of stocks must go“.
The former official began his presentation with a powerpoint to show that Argentina has had “very poor” per capita growth over the past 50 years, ranking second to last only ahead of Venezuela in a ranking of Latin American countries. An x-ray that included 22 years of recession, 39 with inflation above 20%, and only 8 with economic growth and at the same time inflation below 10%.
By the end of the month we will be without reservations. I don’t think they will use the deposits, they will have to do something, like more restrictions on imports-
Guido Sandleris
Former President of the Central Bank
In this context, he said that the “Achilles heel” is the prosecutor and pointed against it the “madness” of public spending between 2003 and 2015, as according to his calculations it doubled from 22% to 40% of GDP. This situation -he continued- Macri tried to correct it in 2015 and spending fell to 36% of GDP. “Maybe it was too slow”, he said, in line with what the former president is proposing today. And he said spending under the current administration is higher than in 2019.”Spending more is popular, spending less isn’t.“, He added.
“The consequence of high inflation is that in Argentina we now have 40% poverty and if we see young people and children it is well above 50%, the economy cannot continue like this because the results are horrible, we need a change,” he said. . However, questioned the “piano plata” and exchange controls implemented by the administrations of Cristina Kirchner and Alberto Fernández to contain inflation and exchange rate pressures. “It’s unsustainable,” she said.
In his presentation, he outlined a scenario with an exchange rate gap of 100%, a “Frankenstein” exchange regime, and the loss of $17 billion in exports due to the drought. Even with that shock, she assured him soybean production will be similar to a normal year. However, he estimated it by the end of the month “we will be without reservations”. “I don’t think they use deposits, They will have to do something, more restrictions on imports,” he predicted.
Nicolás Dujovne’s former economic policy secretary predicted a 3.5% deficit this year, 120% inflation and a 4% drop in GDP. And in a review of the deal with the IMF, he argued that Massa corrected the spending at first, but with “many tricks, That they work less and less. “The result of the program has been a complete failure,” he assured from Washington, where the economy minister is seeking funds and aid from the Fund.
Source: Clarin
