The former Minister of Economy,
Domingo Cavallo
, was surprised by the economic results that Javier Milei achieved since he took office, but he asked the
private sector
, particularly food companies and laboratories,
to “collaborate more” to avoid price spikes.
In addition, he provided his recipe to get out of the dollar trap.
Cavallo, to whom Milei expressed his admiration on repeated occasions, said that he sees the economic future
"better than I anticipated as soon as the announcements of the exchange rate adjustment and the liberation of all prices were made."
In statements to
Todo Noticias
, he revealed that when the economic changes were implemented he believed that there would be
"greater transfer of the effect of the devaluation to prices."
In this regard, he observed in line with the evaluation he made in his personal blog: "What I notice now is that it is fading. It was strong in January, but in February there is less transfer to prices."
However, the former minister of Carlos Menem and Fernando De la Rúa
admitted to being "concerned" about the "recession"
and criticized consumer goods and pharmaceutical companies for having
"exaggeratedly pushed prices"
after the liberation of prices.
In that sense, he praised the meeting that Luis Caputo held this Wednesday with representatives of the main companies in the consumer sectors.
"It is very good that he meets with the CEOs of food companies and other types of companies, I also recommended that he meet with pharmaceutical laboratories, and that he make a proposal to them in the sense that all prices have been released, something that the private sector always wanted, but
it cannot be that companies take advantage of that to hit exaggerated prices
," said Cavallo.
Domingo Cavallo complained about price increases and asked private companies to "collaborate" with the Government.
And he continued with his rebuke to the consumer goods sector: "In many cases they said 'the dollar is not at $880, it is at $1,200 or $1,300' and they increased prices thinking about that dollar price level."
Cavallo stated that the private sector "that really wants the economy to function well" and move "towards an open economy, with freedom in all markets without the State intervening," must "
collaborate more
. "
However, he clarified that readjusting prices does not imply "a price agreement that only represses inflation."
In that sense, the former minister complained about the high prices of medicines.
“Everything that is food, especially medicine,
I think it is outrageous that the prices of medicines have increased,
they have to collaborate so that the government can lower inflation without causing so much recession,” he insisted.
Cavallo's recipe for lifting the stocks: where should you start
In the extensive interview given to the program
Just one more turn
, Cavallo also provided his recipe for getting out of the exchange rate trap and said that he recommended it to both former minister
Sergio Massa
and the current head of the Treasury Palace,
Luis Caputo.
"The first thing you have to do is
lift the financial barrier for all transactions that are not commercial, exports-imports
. All the rest of the transactions that are currently carried out through the dollar counted with liquid, the MEP, all of that is has to be replaced by a totally free market," he said.
He anticipated that once these restrictions are lifted "we will really know what the value of the dollar is."
Domingo Cavallo was surprised by the results of the economic measures.
Meanwhile,
he downplayed the value of the blue dollar as a reference price
.
"The parallel dollar is a dollar for banknote transactions that people previously bought as a form of basic savings and now, faced with the need to maintain certain levels of expenses, the middle sectors sell it.
That is not a relevant value of the dollar
R. We have to see what the price of the dollar would be in a free, truly free market," he analyzed.
In that sense, Cavallo said that once we know what the value of the dollar is and
"especially if that value of the free dollar is converging to the official dollar
," we can begin to
“liberalize the entire exchange system
and we will be able to stabilize the price of the dollar from a certain moment onwards.”
On the other hand, he stressed what is one of the most important points for this plan to be successful: "That people who have
dollars abroad,
not just those they have in their mattress or safe deposit box, find that it is convenient to bring them in Argentina and put them into circulation.
He stated that for the aforementioned to happen "it is also necessary to eliminate elements of financial repression."
In this way, he explained, "people will be able to deposit those dollars in the system and they will be used to finance working capital and investments."