04/01/2021 16:30
Clarín.com
Economy
Updated 04/01/2021 16:30
Former minister Domingo Cavallo analyzed the Argentine economy, predicted
chronic inflation with stagnation
"in the medium and long term" and pointed against Axel Kicillof.
In addition, he said that the solution to the economic situation the country is going through will require "a great political defeat for Kirchnerism" and added that it may come "after a new hyperinflation."
The former Minister of Economy of the governments of Carlos Menem and Fernando de la Rúa analyzed the current situation and the economic future in his personal blog.
There, he assured that
the scenario of "strong devaluation and hyperinflationary lack of control"
was far from the horizon, thanks to the increase in the price of exports and more professionalism in exchange management.
Domingo Cavallo pointed out against Axel Kicillof, "economic ideologist of Kirchnerism."
Photo Mauricio Nievas
However, he
warned about the
"medium and long term" trends in the management of the economy.
In that sense, Cavallo listed the factors that arouse his concern.
He pointed to a commercial and financial closure, the nationalization of productive sectors,
government intervention
in the markets, tax pressure, public spending and the "carefree"
monetary
and domestic debt issuance.
Domingo Cavallo highlighted some of Martín Guzmán's measures, but warned about the Argentine economy.
Photo Rolando Andrade Stracuzzi
He awarded all these phenomena to Kicillof, whom he described as the "economic ideologue of Kirchnerism."
The result will be, for the former minister, a
"secular stagflation"
: a tendency to persistent stagnation with chronic inflation, a phenomenon that will last "for many years."
The exit: defeat K and new hyper?
From his point of view, the solution "will require a
great political defeat for Kirchnerism"
, although that condition will not be enough.
It is also necessary for a new government to carry out changes "with a sequence and intensity that attract the essential popular support to ensure their sustainability over time," he said on his personal blog.
Domingo Cavallo, with Fernando de la Rúa at the end of 2001. Photo DYN archive
He was also concerned about the
consequences of the pandemic
in the field of "economic ideas."
He said that the coronavirus crisis can make the entire Argentine leadership believe that two practices will regain validity around the world: strong interventionism and fiscal and monetary expansionism.
Lastly, he predicted that finding a solution will be even more difficult than the way out "from the stagnation of the decades that preceded the hyperinflation of the late 1980s."
And he warned: "It may happen that the solution is only found after a
new hyperinflation
."
AFG
Look also
The third Guzmán law, the councils of the Brazilian Perón and the opposition Menemism returns
Domingo Cavallo: "Martín Guzmán does what he can: manage the economy in the midst of a general disorganization"
