A top adviser to presidential frontrunner Javier Milei has revealed details of the libertarian lawmaker’s economic plans for Argentina.
Darío Epstein assured this week that a potential Milei administration would move “urgently” to a zero fiscal deficit, avoid a Bonex Plan or hyperinflation and also “solve the issue of Leliq bond liabilities as soon as possible.”
“We will respect contracts and honour debts. It’s no minor thing to say this aloud two months away from December, because many people are talking about a Bonex Plan, or a likely hyperinflation. We don’t want that to happen, because in both scenarios, you end up hitting small savers or savings in general,” the economist highlighted.
During talks organised by an investment fund, Epstein believed hyperinflation “is the most perverse form of adjustment, because it attacks the underprivileged directly, and they have fewer possibilities. And it leads to enormous levels of poverty.”
"That scenario doesn’t help anyone. Much less Argentina,” he stressed. He also held that one of the cyclical issues worrying him the most are the Leliqs issued by the Central Bank.
“We need to solve it as soon as possible, because it’s repressed inflation, and if I want to avoid hyperinflation, I need to control that,” he highlighted. In this respect, he added: “I’m working on this, because if you clean up these securities somehow, it’s much easier to think about tidying up international trade firstly, and then currency restrictions.”
On the other hand, Epstein said that “the only anchor we can have initially is fiscal, there is no other. We have no reserves, no credibility, no credit. So it’s urgent to bring the fiscal deficit to zero. Actually, if it could be turned into a surplus so much the better, and as soon as possible.”
“Our estimates are that the country will have a US$20-billion-plus trade surplus in 2024”, and that level of income, he claimed, could lead to a “logical exchange rate, not kept behind on purpose.”
“I don’t have a number (for the value of the exchange rate) but it’s clear to me that I can’t use one fostering imports and negatively affecting exports, and the gap is no good to me either. Because it doesn't help to devalue either when the gap is 100 percent the next day,” he underlined.
As for the measures announced by Economy Minister Sergio Massa, he assessed: “he was doing 100 kilometres per hour, putting problems off, complicating the future, but avoiding hyperinflation. Now he has pushed the pedal and is doing 240 kilometres per hour. So we’re worried that something unexpected might happen over the next few weeks.”
Lastly, he pointed out that from La Libertad Avanza “we would like a normal transition to the Presidency on December 10, whoever it might be, the inauguration must be without a crisis. So we’re concerned about what’s going on.”