Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.
Etchebarne was critical of the current course of the government and maintained that “Argentina is already in a pre-hyperinflationary process“
EL CRONISTA: The Argentine economy faces various challenges related to lack of dollars, inflation and being indebted both with the IMF and with private entities. Debts were renegotiated in the first two years of the Government, but Agustín Etchebarne maintained that “the market knows that the country is going to have to face a new restructuring“.
“Argentina is broke. The proof is that one can buy an Argentine government bond that promises to pay US$1 million for US$200,000; that is, with an 80% discount,” said Etchebarne, who criticized the policy carried out by the Government and the Central Bank.
Looking ahead to 2023, the economist and general director of Fundación Libertad y Progreso considered that “for next year we can expect a stagflation scenario, with a risk of mega-devaluation or some kind of compulsory exchange of deposits for long-term bonds “.
In addition, he explained what keeps the economy running: “The only thing that saves us from an explosive scenario are the credits that multilateral organizations, such as the IMF and the IDB, grant us quarter after quarter.”
HYPERINFLATION, MASSA AND THE BUDGET: ETCHEBARNE’S PROGNOSIS
According to the economist, “If we analyze the management of (Sergio) Massa in terms of his ability to solve Argentina’s structural problems, the rating would be “fail”. Now, if we analyze him politically I think his goal is to postpone the crisis, he managed to kick the ball forward”.
Etchebarne also considered that for this year they expected “inflation above 60” but that they fell short and by 2023 “it will be double that figure.” Regarding the bill being analyzed by Congress, he stated that “the budget is more of a drawing than a mechanism for the rational allocation of public resources.”
“Inflation went from 2% per month to 4% and then to 6% and 7% per month. Reaching 50% per month, which would be Phillip Cagan’s definition of hyperinflation, is not that far away, unless the Government undertakes a more consistent stabilization program,” he explained about the price increase that is 83% year-on-year according to the INDEC and it is expected to reach 100% in December.
To conclude, he detailed the plan they have at the organization he leads: “At Fundación Libertad y Progreso we think that the way to solve the problem is to accept that Argentina is bankrupt and carry out a banking and financial reform, which includes recapitalizing the BCRA, this must be done with a set of profound structural reforms”.
