2024-11-11 02:55:00
Gabriel RubinsteinPresident Javier Milley and Economy Minister Luis Caputo, said the former economic policy secretary to former minister Sergio Massa during the Alberto Fernández administration. “They’re doing a great job and could be very successful in the coming months and quarters.””.
The former official said in a post on his X account (formerly Twitter): “Despite all the fallacies”since this is “the worst crisis in history, we are coming from inflation of 17,000%, peso debt is booming and commercial foreign debt is about to explode”, the current economic management will lead to “very low” inflation, close to 1% monthly, exchange rate differentials below 20%, re-entering external markets and The economy grows at a rate of 5% per year”.
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However, he believed that the President and Ministers “They buy political, economic and financial risk”which can force “the government that may succeed at that time” to make relevant “economic adjustments.”
“The absence of broad consensus significantly increases the risk of reversibility. The last time Argentina did not have these risks was in 2007. Thanks to the inheritance of very good macro policies led by Lavagna (primary fiscal surplus of 3% of GDP, high dollar, low inflation, high growth, etc.), these risks did not occur risk. There is no risk of macro reversal. These risks are still important now,” Rubinstein explained.
In this sense, he noted that “it is impossible to be certain that the dollar will remain low forever.” ‘Significant’ risk of worsening employment declineand getting “lower quality jobs.”
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He believes that another important risk is “Could cause severe exchange rate instability” Because “the U.S. dollar is largely considered low, any political or external shock” would encourage the purchase of foreign currencies. “Beyond that, if central banks don’t have dollars to deal with a run, the size of the run could be huge (whether we have stocks or not, a floating dollar or a fixed dollar),” he commented.
Finally he promised “Pretty much everything is going well” and if the situation leads to “economic success” the president has the potential to “get a very good electoral result in 2025 and a chance to win in 2027”. “It would be convenient (or at some point) if the models could be improved sufficiently to minimize political (reversibility), economic (dollar is definitely too low) and financial (combination of low dollar and lack of BCRA reserves) risks is necessary).
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**Interview with Gabriel Rubinstein: Perspectives on Argentina’s Economic Future**
**Editor:** Gabriel, thank you for joining us today. You’ve recently expressed support for President Javier Milei and Economy Minister Luis Caputo. What gives you confidence in their economic management?
**Gabriel Rubinstein:** Thank you for having me. I believe they are doing a commendable job given the circumstances. Despite the severe economic crisis—characterized by inflation rates peaking at 17,000% and looming foreign debt issues—they have the potential to stabilize the economy significantly in the coming months.
**Editor:** You mentioned in your post that you foresee inflation dropping to around 1% monthly. What specific measures do you think will contribute to this reduction?
**Gabriel Rubinstein:** The current administration is working towards tightening monetary policy and fostering conditions for a more stable economic environment. If they can successfully manage the currency exchange rates and restore confidence in the peso, we could see the inflation rates decline sharply as a result.
**Editor:** You also referenced potential economic growth of about 5% per year. How realistic is this target given the current challenges?
**Gabriel Rubinstein:** While ambitious, it is possible if the government can re-enter external markets and attract investment. The key will be maintaining a consistent and transparent economic approach that builds trust both domestically and internationally.
**Editor:** You did mention some risks involved, especially regarding the absence of broad consensus. Can you elaborate on that?
**Gabriel Rubinstein:** Absolutely. The lack of broad political support increases the chances of reversibility in economic policies. If the government cannot unite various political factions or address public concerns effectively, it may face significant pushback, which would undermine any progress made.
**Editor:** what advice would you offer to the government as it navigates these complexities?
**Gabriel Rubinstein:** I would encourage them to foster dialogue and seek collaboration across different sectors. Building a broad coalition can help mitigate risks and ensure that any necessary adjustments to economic strategies are more widely accepted. This approach is crucial to stabilize and grow the economy sustainably.
**Editor:** Thank you for your insights, Gabriel. We appreciate your time today.
**Gabriel Rubinstein:** Thank you. It was a pleasure to discuss these important issues.
