Fiscal Surplus Kills the Concept of “The State Saves You”
With eight consecutive months of primary surplus, in seven of which there was a financial surplus, there are no longer any elements left to doubt Javier Milei’s government’s commitment to fiscal balance. By the end of the year, Milei will have cut around 4 points of GDP. In the first 8 months, the accumulated primary […]
Some Items Are Finding Their Place in the Shelves
President Javier Milei had good and bad news in Congress last week. He got the coalition to sustain the veto on the pension formula but lost on the issue of the intelligence funds decree and the education funds. To some extent, it can be said that the week shed more light than shadows. Having achieved […]
Confidence Improves in a Troubled World
The economic team must be euphoric. The exchange rate spread is at 32% and it reached its lowest value since May, having exceeded 50% at many points last July. It can be interpreted as a symbol of confidence, with bonds and stocks holding up quite well in a bad week for international markets. There may […]
Good Vibes in the Last Days of August
In recent days, the vibes in the Argentine market seems to have changed. Let’s hope it stays this way. The Central Bank ended August with net purchases in the exchange market and bonds and stocks rallied. Country risk dropped 74 points against the end of July, but 206 points against its peak in August that […]
Economics vs. Politics
There are several economic issues that now depend directly on political criteria, alliances in Congress, vendettas and more. The most obvious case was the approval in the Senate, by an overwhelming majority, of the change in the pension payment formula. This, if applied, implies a fiscal cost of 0.2% this year and 0.9% of GDP […]
Public Debt Rises: Does Size (In Dollars) Matter?
The July data showed that public debt reached USD 452 billion, almost 10 billion more than in June. So far this year, the debt has grown by USD 82 billion. Several accounting and exchange rate issues justify the increase. For us, there is no significant change in the capacity to service that debt, which is […]
The monetary base is growing, and it is not bad news
Popular wisdom has it that the government has adopted a zero-issuance monetary policy. However, the reality is somewhat different. The monthly monetary report for July, just published by the Central Bank, clearly says that the monetary base grew 10.6% in July against June in real terms and seasonally adjusted. While this is not news to […]
Seeking Balance
Argentina needs to stabilize. Javier Milei and the economic team made an extraordinary contribution given the inheritance received and some of the results we have seen in these first almost 8 months. Although we do not believe in the 17,000% mentioned by the President, we do believe that there was a risk of hyperinflation when […]
Lifting FX Controls on Good or on Bad Terms
There is a consensus that FX must be lifted, but disagreement remains about how and when to do so. Maintaining the controls has costs, because there are investments that will not take place until they know whether they will be able to withdraw dollars and pay dividends. While FX controls remain in place, there is […]
The Art of Plumbing and Monetary Issuance
The government is focused on turning off the money-issuance faucets. As for that one corresponding to the government financing, there is not any opposition, quite the opposite. The IMF and the entire community of economists and businessmen celebrate that the government has a surplus and that the faucet is not only closed but practically prohibited.