Daniel Ardana: “I don't think it's right for the president and his officials to say what companies have to do with prices”

Economist Daniel Ardana He said today that it is not right for the president and his most important officials to tell companies what to do with prices.

Artana is the Chief Economist of the Latin American Economic Research Foundation (FIEL) and a member of the economic committee he chaired during the election campaign. Carlos Melkonian Along with the nomination form Patricia BullrichHowever, the economy bottomed out this quarter and was optimistic that it would start a recovery, although it was unclear whether it would be as strong as the “Nike Pipe”, V-shaped or softer.

In addition, he warned of the risks of exchange rate delays and although he compared anger Javier Miley Along with his fellow economists, he said he was concerned when the president tried to “pimp” journalists without providing evidence, which he felt “has an anti-democratic undertone.”

Interviewed on the “Sábado tempranísimo” program on radio Mitre, Ardana indicated that it would be very positive if some of the administration's reform plans move forward from next week.

“I hope that the laws are approved to prove that some reform efforts are not an isolated idea of ​​the president and his collaborators. There are many political forces that accept various reforms. It is very important, above all, even in a limited version, labor laws. The issue of fines in case of dismissal with the aggravating factor of the case There is, and it is important that there is fair compensation for SMEs and workers in case of layoffs, and this should not be the business of labor lawyers,” he said.

Ardana was very optimistic about the speed at which the inflation rate will decrease, but was cautious about the strength of the eventual recovery of the economy, which the president said in his speech at the Libertad Foundation on Wednesday – eschatologically – that will rise. “Like a diver's chin.”

“Inflation is coming down. Our forecasts are not as optimistic as the government says, but I think May will break the 8% level, and inflation is likely to end at 5% (monthly), as the president says. With monetary and fiscal tightening, it is difficult for inflation to reach double-digit levels without higher wages,” he explained.

On the contrary, he was very cautious about the state of economic activity. “My impression is that the economy is going to recover, but it's very difficult to predict the strength of the recovery. A few things from here will help the recovery on the edge, namely the recovery of the agricultural sector, which will be less than expected but will be important, and there are good data on oil and mining activity.”

Regarding the level of internal consumption, he said the change in the pension formula approved by the DNU “represents a modest recovery of what retirees lost in 2023 and so far in 2024; I am not arguing whether (the reform) is good or bad, but it is an improvement compared to the pension offered now. And the dynamics of collective efforts, It has also led to some recovery in real wages, which have largely fallen as the economy overcorrected.

Another element in favor of the “rebound,” he noted, is country risk downside. As that happens, Argentines are generally wealthier with savings in bonds and stocks, which leads them to spend a little more. So, I believe there are several elements that will lead the economy to bottom out at some point in this second quarter, from which the recovery begins,” he said.

On the other hand, Ardana distanced himself from the views of the President, Minister Caputo and the libertarian. Jose Luis EspartCompanies have to cut prices and the dollar is not going to move much from its current value of about a thousand pesos.

“I'll take that to another point of discussion: If you ask me where some of the risks are going to take their toll later, one is that the real exchange rate (ie, the purchasing power of the dollar in the domestic market) lags. I disagree with the president's reading that there is no problem because the exchange rate gap is narrow. The market is still full of distortions: 20% settlement for non-normal imports, because we have important payments like one in the coming days. If you delay the exchange rate, it is very difficult for us to accumulate reserves There have been rate delays and I don't think it's right for the president and his top officials to tell the companies what to do, let the defense of competition take over.

Finally, Ardana contrasted the president's anger and derision with other economists, even with those who agreed with him on the necessary economic reforms. “As long as the discussion is done respectfully, I don't think it's bad. But the president will have to look at the criticism and see if there is any use in it. I'm even more concerned that he's turned to a well-heeled, unsubstantiated journalist; It has an anti-democratic tinge.

On the “sustainability” of fiscal adjustment, Arthana stopped short. “There is criticism that it is a pure blender and that it is ephemeral. I also don't believe it's all chainsaw, as the president said. The truth lies in the middle. There are temporary things that are not paid for especially electricity generators. The bonus is coming and it's not right. But henceforth, as the fees are raised, the distributors will have the ability to pay. There has been a huge drop in pensions, but the government is going to tweak the formula and change them a bit. From a financial perspective, if the DNU formula survives judicial review, there will be permanent savings. It's not all blender. “There's a blender that turns into a chainsaw.”

He concluded that the same would happen with transfers to provinces. “Some will recover, but you will have some permanent savings. Also the deficit in public institutions in second semester is less than first semester.