Hernán Lacunza took the stage with a joke. “They asked me to give good news, but that’s an oxymoron,” he said, eliciting a few smiles. It was Thursday morning and He was speaking to an audience of regarding 150 leaders from all over the country who support the presidential candidacy of Horacio Rodríguez Larreta in 2023.
“It’s going to be cloudy. There will be no sun, but there will be fog. We are going to see some storms, isolated showers. There is not going to be a tsunami. They are working so that hail does not fall”, said the former Minister of Economy regarding the next 15 months of government that remain for the Frente de Todos of Alberto Fernández and Cristina Kirchner.
Then translated: “Cloudy means stagnation. Haze is high inflation. Isolated storm is the blue and prices will go down and up. That there is not going to be a tsunami indicates that there is not going to be hyperinflation, a playpen or default. The hail is the exchange rate, which is what the government is focused on today.”
He left room for a kind of praise for Sergio Massa: “He has the muscle to coordinate what was an anarchy.”
Lacunza denied that the problem today was linked only to politics. “There is an objective economic problem. Dollars are lacking and pesos are left over”, he described, and affirmed that Massa is facing it with “monetary orthodoxy, financial procrastination [pateando deuda] and selling adjustment, with more noise than nuts”. There he was tough on what he called the “Plan I want to arrive”. Lacunza said that the Government does not face the fundamental problems, but rather postpones them. “He does not face unions, governors or public companies,” he questioned, adding that the next 15 months will be of stagnant output and employment, and high inflation.
“The inheritance is going to be rough, maybe worse than in 2015”, warned the economist. Some indicators, he told the public, are going to be worse. He predicted poverty of 40% and inflation of around 90%.
Regarding the plans for 2023, Lacunza raised two very clear objectives: employment and foreign exchange. “Without employment there is no social cohesion; without foreign exchange, we went bankrupt,” she maintained. Then he spoke of three pillars: he asked to be integrated into the world, not to spend more than what he earns, and suggested that the therapy will be shock. “Let’s not fall into the trap of shyness. Let’s not fall short. Let’s not be ashamed of what we have to do “clarified the economist. “The macro commands. Do you know why it went wrong for us? For the dollar. We need general balance”, he pointed. Then he left a warning: “If we don’t do this, the dollar is going to be a kite.” He was in 2018 and 2019.
He anticipated that, with inflation at these levels, real wages will fall and there will be no investment. And that scenario will complicate exports. He criticized the lack of rules of the game, the obstacles to imports and said that the State’s job is to “pave the road” and simplify, both at the national and provincial levels.
“Agribusiness, mining, energy, knowledge services, tourism and construction”, listed as key sectors. “The first three contribute foreign exchange; the other three, employment. The six have a common trait: they are in all the cities, in all the provinces, in all the towns. It spills over to the whole country,” he stated.
At the end of the exhibition, which lasted 10 minutes, Lacunza recalled the three reforms made by the macrismo. The forecast; “The one with the stones,” he recalled. Taxation and fiscal consensus. “Two years later they reversed. In 2020, they did just the opposite. Half of those who did are the same people. What the fuck did they vote in 2017! This is a country without convictions. He doesn’t deserve credit. We have to convince ourselves of what we have to do so that it is not reversible. So that whoever takes the post builds on what we built”, finished the former Minister of Economy. He played local; The audience responded with applause.
One day following the Together for Change meeting, at the Ministry of Economy, trade unionist José Luis Lingeri (Aguas) arrived on the fifth floor of the Ministry of Economy. His “bodyguard”, already in the elevator, confirmed it in code: “The duck is in the water”. Massa assured him, Andrés Rodríguez (UPCN) and Gerardo Martínez (Uocra) that the “adjustment” was not going to touch them. Public works, key for governors in an election year, will rise 0.3 points compared to this year (it will be 1.58% of GDP) in a budget with estimated inflation of 60%. Private analysts believe that, without a stabilization plan, the price rise might be close to 100%.
Politics looks at Massa’s steps and his numbers. The minister will not raise taxes, but he left Congress with a “una offprint”, a menu to eliminate corporate tax benefits, as suggested by the Fund. But, in addition to politics, Massa looks at the economy, which -as Lacunza said- has a single variable: the dollar.
For now, Massa’s economic team is betting on a devaluation in installments. The soybean dollar opens a window to improve the stock of reserves -it would exceed the US$5 billion mark-, but, at the same time, it complicates the BCRA’s assets, encourages inflation due to the greater monetary issue when it comes to buying dollars. Despite the rise in rates or the bills dollar linked, the free pesos fly to the financial dollars, widening the exchange rate gap, mother of the dynamics that precisely erodes the reserves of the Central Bank.
The Ministry of Economy is eyeing the “tourist dollar” to stop the bleeding, especially weeks before the World Cup in Qatar. “There are ideas, initiatives, proposals, but they are sectoral,” they say on the fifth floor of the Palacio de Hacienda. Raising earnings perception (it’s already at 45%) would have little impact at this time of year. Returns are very soon. Bringing it to the MEP might impact your contribution and, they say, also in the collection of the PAIS tax. That rise would hit the services of streaming and in the importation of medicines, they trust. “It is necessary to have a comprehensive look”, account in the Ministry of Economy. The analysis is still in process; nothing is ruled out.
Meanwhile, Martín Insaurralde, who often talks with Massa, is preparing next week -with several Buenos Aires business chambers- a “move” to promote the “prioritization” of dollars. A statement from Adiba, Cepba, FEBA and Uipba had already “moved” last week. Massa was invited next Friday to an event with CAME, the first to claim restrictions. Alfredo González, its president, had done it in a meeting with the Secretary of Domestic Trade, Matías Tombolini. In the UIA, which denied last week that it was asking for a “Qatar dollar”, they believe that a clamor operation is being forged. The status of the situation is: nothing is ruled out, the sectors have to ask for it.
As an example, a “cry” had already reached another window very recently. Near Tombolini they mentioned the benefits of being able to use a “dollar hard” (more expensive) for imports, coincidentally, following Cgera -another business chamber- suggested it. The 2023 Budget project then included a specific laundering for the import of supplies. In addition, in another article, the construction was expanded. That sample of the official action has a bonus track: “They asked for a window and we opened two”, they tell in Economy regarding Massa’s decision to promote the possibility in the US of an automatic exchange of financial information to search for US$100,000 million of undeclared Argentine accounts. After his meeting with the Treasury and the White House, the minister was excited. It would be quite a political achievement for a State related to leaks of tax data that end up being an input for political operations.
