Argentina needs moderate and sustained inflation for several months to consolidate its negotiation strategy,” said Alfredo Ariza-Thomas, economist and financial advisor. Ariza-Thomas provided a detailed analysis of the course of President Javier Milei's management and Economy Minister Luis Caputo's actions amidst a context of drastic economic transformations in Argentina.
In an interview with Noticias Argentinas, Ariza-Thomas noted that the possible elimination of currency controls could send a strong message to the market and foreign investors, as long as inflation is effectively reduced, which is a significant challenge facing the country. Additionally, Ariza-Thomas emphasized the importance of oversight and control in concession processes, especially in privatizations.
Ariza-Thomas described Milei's government as a "study phenomenon" due to the profound and rapid changes implemented, marking a different approach in administration. The economist stressed the relevance of expectations for the success of reforms, urging to maintain efficiency and accountability as priorities, regardless of the management model.
Regarding measures aimed at reducing public spending, Ariza-Thomas highlighted adjustments in the structure of the State and changes in the Federal Administration of Public Revenue (AFIP), which seek to improve efficiency and facilitate negotiations with the International Monetary Fund (IMF) for fresh financing. While showing optimism, Ariza-Thomas underscored the importance of consistency in reducing inflation to reach an agreement with the IMF.
The economist recalled the importance of focusing privatizations on efficiency and transparency, avoiding political interference that could negatively impact service operations. Furthermore, Ariza-Thomas highlighted the necessity for the reform process to be based on the trust of the population and investors to ensure its stability and durability over time.
