Martín Redrado, former president of the Central Bank, analyzed the economic crisis that Argentina is going through and indicated which measures and how they should be implemented, as well as which ones should be discarded, to achieve a situation in the current complex scenario.
“Neither controlling prices through truckers nor dollarizing are concrete solutions for Argentina. The two extremes end up seeming that neither of them solves the problem of inflation,” said the economist on the night of this Tuesday, May 23.
The $2,000 bill is too small
“The nature of the problem is fiscal. If you attack with price controls for truckers or with dollarization, you are attacking the consequences. We propose a solution with three vectors: zero deficit, zero issuance and single exchange ratebacked by laws”, explained Redrado to Nicolás Wiñazki and Santiago Fioriti in We are good (TN).
The former official maintained that “this is the serious and responsible way to resolve inflation.” He then avoided pronouncing on dollarization, but pointed against public sector subsidies: “More than two thirds of the deficit that the country has, of the lack of financing that the public sector has, is due to subsidies. And in some cases very misdirected.”
In direct reference to a report on alleged corruption surrounding public transport subsidies, Redrado suggested: “It is a big trout to subsidize companies. You have to subsidize the people who need it. We do not give subsidies to companies, it is a basis for corruption.”
The former president of the Central Bank warned that “From now until December we are going to be in tumbling” and that “Argentina in its economic phase is walking on a thin ledge”, which “has on one side the risk of falling due to inflation or, on the other, a slope of exchange rate tension.”
Massa gave another relief to the middle class, but the banks left him a list of claims
“We are going to be between the exchange rate tension, the inflation and the recession from here to the end of the year”he maintained, although he was optimistic and said he was “convinced that a new phase begins at the end of the year with concrete solutions in terms of inflation and growth.”
Likewise, he remarked that one of the main drawbacks that Alberto Fernández’s management had is that “The government from the beginning has lacked a direction”. “He has lacked a country project. We don’t know where this bondi is going, he never had any direction,” she shot.
Economists explain that Massa’s measures are not enough amid extremely high inflation
“The Argentine government was working with the ‘VV’ plan: ‘let’s see’. Improvising on a day-to-day basis, and these results come out of improvisation, more poverty, more inflation,” said the economist and lamented: “Today we are among the top 10 countries with the most poverty in the world.”
Along the same lines, he added: “Everything that affects the quality of life of Argentines has deteriorated as a result of this improvisation. It is not easy to solve it, but it is possible. With a stabilization and growth program with a plan, team and laws, as we have been working on with Horacio, I am convinced that we will come out.”
To conclude, Redrado launched a harsh prognosis for the electoral result of the Frente de Todos: “The failure of this government will mean that they have much fewer votes than in 2019. It is difficult for today to exceed 30%. Cristina is begging them to get to the ballotit seems that they are fighting between being second or third”.
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