“Looking to 2025, the dilemma is economic reactivation or stocks”

For the former Minister of Economy, Hernán Lacunza, The economic situation of the country is better than 10 months ago and will tend to consolidate that trend in the medium and long term, although ahead some tensions remain to be overcome. Lacunza assured that “In September 2027 we will be better than in 2023. If at that time we have a more dynamic and well-being country than at the end of 2023, Argentine assets, both real and financial, from homes to bonuses, “They should be worth more.”

The economist participated in a talk organized for clients of Banco Galicia, where he assured that in the medium and long term His outlook is optimistic, although he stated: “We are better than ten months ago, undoubtedly, but we have greater tension than three months ago. And that must be recognized.”

In that sense, he explained: “Let’s remember, December compared to the middle of the year the country risk had dropped from 2700 to 120 points. The exchange gap, 150% to 20%, the net reserves from -11 1,000,00,000 dollars to zero, the inflation of 25 monthly or three if you want to take the latest data from the previous government at 4%. And that happened in the first half of the year and in the last quarter what we see is that there was a reversal.

In that sense, the economist warned: “What worked in one semester, stopped working in the last aspect,” and added: “As there is a gap between the financial, which is usually instantaneous, and the real, the productive with its social impacts, which usually has a lag; Paradoxically, this last quarter was more stressful financially, but it was better productively as a result of the previous semester. “There is an incipient rebound.”

Lacunza described the management of Javier Milei’s economic team in these first ten months of his mandate: “They have a ten in fiscal policy, a seven in monetary policy y a four in exchange rate policy. “It’s enough for them not to repeat, but not enough to promote.”

Like most of his colleagues, Lacunza believes that now the Government has to choose between prioritizing the recovery of the Central Bank’s reserves and the exit from the stocks o consolidate a scenario of economic reactivation with falling inflation. “We have three desirable objectives: that lower inflation, lift the stocks and have reserves to grow. There is a positive correlation – If I lift the stocks, the dollars will appear, the reserves will increase, since more supply will appear than demand. But undoubtedly as the exchange rate has been lagging, the official exchange rate will probably rise, so that will inexorably have some short-term effect on inflation,” he analyzed.

“If I want to keep inflation low, I have to preserve the stocks at the cost of losing reserves because it is the collateral damage of choosing inflation as a priority objective, which I understand from a political and even social point of view. But nothing is free,” he said.

In that sense, he stressed again: “Without losing sight of the better country we have today compared to the one we had a year ago and that I think we are going to have in a year and the best country we are going to have in three years. “Without losing sight of that trend that seems very favorable to me; in the current situation and looking to 2025, basically the dilemma is reactivation or stocks? Of course, with stocks it can rebound, but it will be more anemic.”

“Like any dilemma, this does not have a categorical answer: there are costs and benefits on each side,” he said.