The former Minister of Economy, Sunday Horsewas surprised by the economic results that Javier Milei has achieved since taking office, but asked for the private sectorin particular to food companies and laboratories, “collaborate more” to avoid price spikes. Furthermore, he gave his recipe for getting out of the dollar trap.
Cavallo, for whom Milei has repeatedly expressed his admiration, said he is observing the economic future “better than I expected as soon as they made the announcement of the exchange rate adjustment and the release of all prices.”
In the statements a All the newsrevealed that once the economic changes were implemented, he believed they would occur “greater transmission of the effect of devaluation to prices.” In this regard, he noted, in line with the assessment made in his personal blog: “What I notice now is that it is fading. It was strong in January, but in February there is less pass-through to prices.”
However, the former minister of Carlos Menem and Fernando De la Rúa admitted he was ‘worried’ about the ‘recession’ and criticized consumer goods and pharmaceutical companies for targeting them “a blow to exaggerated prices” after the price is released.
In this sense he praised the meeting that Luis Caputo had this Wednesday with representatives of the main companies in the consumer sectors.
“It is very good that he meets the CEOs of food companies and other types of companies, I also recommended him to meet the pharmaceutical laboratories and make them a proposal in the sense that all prices have been released, which the private sector has always wanted, but It cannot be that companies take advantage of this to profit from exaggerated prices.“said Horse.
Domingo Cavallo complained about rising prices and called for private companies to “collaborate” with the government.And he continued with his rebuke of the consumer goods industry: “In many cases they said ‘the dollar is not at $880, it’s at $1,200 or $1,300’ and they raised prices with that dollar price level in mind.” .
Cavallo proposed that the private sector “which really wants the economy to work well” and move “towards an open economy, with freedom on all markets without the State intervening”, should “collaborate more”. However, he clarified that the price readjustment does not imply “a price agreement that simply suppresses inflation.”
In this sense, the former minister complained about the high prices of medicines. “Everything that is food, especially medicines, I think drug price increases are outrageous, “It must work together so that the government can lower inflation without causing so much recession,” he insisted.
Cavallo’s recipe for raising stocks: where to start
In the extensive interview given to the programme Just one more roundCavallo also provided his recipe for getting out of the exchange rate trap and said he recommended it to the former minister Sergio Massa as current head of the Treasury Building, Luis Caputo.
“The first thing you have to do is now remove the financial barrier for all transactions other than trade, export-import. All other transactions that currently take place through the dollar counted with liquidity, the MEP, all of this must be replaced by a totally free market,” he explained. He anticipated that once these restrictions are eliminated “we will really know what the value of the dollar.”
Domingo Cavallo was surprised by the results of the economic measures.While, He downplayed the value of the blue dollar as a reference price. “The parallel dollar is a transaction dollar note that people used to buy as a form of basic savings and now, faced with the need to maintain certain levels of spending, middle sectors sell it. This is not a relevant value of the dollarA. “We need to see what the price of the dollar would be in a free, truly free market,” he analyzed.
In this sense Cavallo said that once the value of the dollar was known and “especially if the value of the free dollar converges towards the official dollar”You can get started “liberalize the entire exchange rate system and the price of the dollar will be able to stabilize starting from a certain moment”.
On the other hand, he underlined what is one of the most important points for this plan to be successful: “That the people who have dollars abroad, not just the ones you have in your mattress or safe, you discover that it is better to bring them to Argentina and put them into circulation.
He said that for this to happen “it is also necessary to eliminate elements of financial repression.” In this way, he explained, “people will be able to deposit those dollars into the system and they will be used to finance working capital and investments”.
Source: Clarin
