“The Government is short of dollars”, Marina Dal Poggetto’s opinion on Javier Milei’s announcements

Javier Milei’s speech at the presentation of the 2025 Budget left much to be said and part of how the president’s forecast will turn out will be evaluated by the market later, when it opens. In the meantime, some economists have already begun to review the new roadmap that the local economy will take. “The government is short of dollars,” said Marina Dal Poggetto, director of EcoGo, a voice of reference for decision-makers.

“This presentation comes after a week in which vetoes, rejections, and non-rejections flew through the air. It was a key week for the pension law,” he stressed. He added: “With which Milei presents the Budget, How novel it is that the President does it (usually the Minister of Economy) on a Sunday and on national television.”

For the economist, the second novelty presented yesterday is that They promise to strictly comply with what they stated in the Budget. This means that “while before it was possible, for example, to increase spending, Now they are going to stand firm on what they have proposed.”.

According to Dal Poggetto, it would be that, “if for some reason the projection of resources fails – either because there are more resources than projected – in that case we are not going to increase expenses. And if, on the other hand, the resources were below the projected level, in that case, we will make sure to reduce spending to ensure a “zero” deficit, touching those items that are not automatically adjusted.

“The clear message is: We are going to keep the difficult to the letter”said the head of EcoGo. Afterwards, according to the specialist, “we can discuss the macroeconomic scenario behind this deficit and how the resource and expenditure figures are set up.”

And in response to the question about whether what Milei presented in Congress makes sense as an economic plan, Dal Poggetto added “first of all, this year Milei does not have a Budget, he is working with the 2023 Budget, adjusted. And, secondly: in literature, Fiscal adjustments are expansionary if and only if they coordinate a collapse of country risk, and the reduction in risk translates into a reduction in the domestic interest rate.” In this regard, he clarified: “The reality is that the Country risk is in the area of ​​1,420 basis points; and the interest rates we are at still leave you out of the financial markets.”

In dialogue with Jairo Straccia, Dal Poggetto clarified that “due to the exchange rate scheme that you are having, you do not have an external surplus. and in that scheme you are short of dollars, and the program requires dollars.”

The other problem that arises, according to the expert, is that, with this exchange rate scheme, “hardly”, Also, you have an agreement with the IMF until next year.