Domingo Cavallo, former Minister of Economy, suggests that Javier Milei’s government lift the currency controls, accumulate reserves, and allow the free circulation of the dollar as a key step to reactivate the Argentine economy.
Cavallo pointed out that although the government’s economic approach is correct, it must be intertwined with measures that stimulate growth. “I believe that inflation, not at a very rapid pace, will continue to decrease, but it has to be combined with an economic reactivation and growth.” He mentioned that the expected investments due to the RIGI could benefit sectors with important natural resources, although he warned that growth requires investment across the entire economic structure.
According to the former minister, the lack of attention to an effective financial system has limited investments. He stated that without a solid monetary system, it is not possible to increase productivity. He emphasized the need for benefits such as the free availability of export currencies to extend throughout the economy, not just to large investments.
Cavallo proposed eliminating restrictions on capital movement and transforming the dollar into legal tender, allowing its use in various transactions and contracts. He also called for accumulating reserves and stressed that the Central Bank needs to do so without fear of generating inflation, as he believes it would increase liquidity and decrease country risk.
This approach, according to Cavallo, would not only benefit the state in terms of financing but also facilitate more favorable credit conditions for the private sector and help control domestic interest rates. The proposal to simplify taxation on loans was also mentioned as a factor to consider in improving the economic environment.
Source: www.infobae.com
