Noises in the economy of the Libertarian Revolution

This is still the case, with inflation hovering between 2.5% and close to 3% monthly, still far from 0% or the “zero point something” that the President announced for August 2026. And given that the exchange rate is still around $1,400, the Government is facing a problem of uncertainty that it tries to eliminate with the purchase of dollars in quantities and the consequent and continuous accumulation of reserves. Very visible: calm the waters sooner rather than later or still far from the winds of the electoral climate.

The point is that economies have the habit of being complex sciences, including, of course, the Argentine economy. For that matter, the official data themselves say here that despite the always promising discourse, the productive activities that generate employment are not ending the stagnation and even less of overcoming a slope that has been going on for quite some time.

“Activity is flying. Everything is going according to plan,” celebrated Javier Milei as soon as INDEC reported on the improvement in March compared to February. Expanded, the panorama reveals that the economic rebound in the first quarter barely reaches 0.5% compared to January-March of last year.

It is worth insisting, then, that according to official statistics, both industry and commerce (wholesale and retail) are at the same level as in March 2023, that is, two years ago, while construction finds its place. The other side is called loss of employment, drop in income, drop in consumption and starting over.

More from this newsletter: Combined with lagging wages and unstable jobs, the old orthodox remedy of raising interest rates sky-high to cool pressures of whatever color ended in records of historic delinquencies and defaults, both in companies and in families.

The way out of the orthodox off-roaders was to put Banco Nación to help the debtors; Of course, it will be under the management of Minister Luis Caputo y Cia.: with interest rates that reach 65% annually and a financial cost estimated at 114.21%. Fit always fit, and not exactly the painless one.

Finally, the case of the BCRA. In order to calm the beasts, the Ministry of Economy assures that the Government has covered the debt in foreign currency of the bonds that mature until the presidential elections: those of July of this year plus those of January and July 2027.

Striking: almost simultaneously, the Monetary Fund advised the Government to rebuild a cushion of reserves before the elections and on that train, go out and take out debt on the international market, even at 10% per year in dollars. And not so striking, at the same time: part of the US$ 14,000 million that matures in 2026 is Argentina’s debt with the IMF and also of the US$ 28,000 million that expires in 2027.

Less dramatic conclusion from Carlos Pérez, former general manager of the Central and current coordinating director of the Capital Foundation led by Martin Redrado: “The country is no longer in intensive care as in the times of Kirchnerism. It is, let’s say, in intermediate therapy. And since it is missing for definitive discharge, it is better not to neglect the patient.”