The costs and perils of policies to muddle through

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The costs and perils of policies to muddle through

Noviembre 2022

The economy continues to be in slow motion mode, as there is a gradual deterioration in economic activity, inflation remains relatively stable in the 6.3% range, international reserves dropped but have not collapsed while the parallel exchange rates remain relatively stable. While there are still concerns about one of the typical Argentine crises that leads to an explosion of the exchange rate, inflation, and domestic interest rates, and which is some cases includes a restructuring of the domestic or foreign debt, the explosion has not happened yet. The government has been able to maintain what at first sight are unsustainable policies through intervention and creative unorthodox policies. In this way, it has been managing to postpone the “inevitable” and its bet is that is it will be able to muddle through throughout the election year.