President Javier Milei stated last night before Congress that
inflation
“will continue to fall sharply and the exit from the stocks is getting closer and closer
. ”
He did not provide details and estimates of how much this slowdown would be and how long it would take.
Nor, when would the elimination of exchange controls occur, something that the Monetary Fund has in the worksheet with the Ministry of Economy and the Central Bank - they were talking about it in recent days - although it does not seem to be in a hurry since Argentina still has negative reservations.
From that point of view, the focus of Milei's speech last night was based on
the fiscal issue, which is the main anchor of his plan
.
Milei began with an introduction in his speech before the Legislative Assembly gathered in Congress, based on a diagnosis of the
inheritance
received and what policies his government follows to reverse the imbalances.
“The last 20 years have been an economic disaster, an orgy of public spending
,” said the President.
“The twin deficits we inherited reached 17 percentage points of GDP.
Five points of fiscal deficit in the Treasury and 10 of quasi-fiscal, generated by the Central Bank
,” Milei began as a balance.
Like most presidents when they appear before Congress, he talked about the problems he encountered.
“The worst in history
,” he cataloged the inheritance received.
He then listed the debt with importers that the Central Bank accumulated, negative reserves of US$ 11.2 billion, “repressed” energy and transportation prices, a gap of 200%, an average salary of US$ 300
(“A third of the formal workers are poor”) and “record destitution with record with social assistance.”
To reverse this, Milei justified the adjustment in public accounts.
“
There are no options left
, the only alternative is to do something diametrically different from the past.
We have to go back to the bases, to the ideas that made this country great.”
On several occasions, the President used grandiloquent phrases to describe a decision to correct inherited imbalances.
“The speed with which the financial surplus was achieved in January is a
historical record for modern capitalism
.”
“Due to the mandate for change that the people gave us and the endorsement of having told the truth in the campaign during our first 82 days, we have carried out
the most ambitious government program in memory
.”
Milei called on the governors to sign an agreement in May that would allow him to make the reforms he was unable to achieve after the legislative setback in February.
Last week, the number 2 of the IMF, Gita Gopinath, recommended that the Government obtain political support to carry out the reforms that she seeks.
Milei, on the other hand, was categorical about the tax issue.
“The organization of fiscal accounts will be done with or without support from the forces.
If they accompany, it will be faster, better and with less social cost.”
He did not talk about dollarization or currency competition
as had been speculated in the previous hours and that is why dollar futures contracts increased 5% yesterday.
The IMF confirmed that for the moment dollarization is not an issue on the table in the negotiation with Argentina for the progress of the Extended Facilities program.
Neither does the request for funds.