In the week of “May Pact”the brand new Minister of Deregulation and State Transformationannounced its first initiatives in economic matters. Despite the appointment of Federico Sturzenegger, which was confirmed last Friday, the exchange rate gap continued to widen and the blue dollar closed at $1,440.

The situation of the country’s economy continues to raise alarms, while doubts surrounding Caputo’s plan increase devaluation pressures, despite having achieved approval of the Ley Bases. The consequences of the adjustment and the blender are reflected in official data, increasing income inequality and unemployment. Below we review some key points to keep in mind this week:

*Leaf Law: This is the first bill that Sturzenegger will send to Congress, seeking to continue with the structural reforms and includes articles that were left out of the Ley Bases. Some of them are: educational reformwith the inclusion of a mandatory comprehensive exam at the end of secondary school; the implementation of trial by jury At the national level (already done in some provinces), the University tuition fees for non-resident foreigners.

Sturzenegger’s first measure was to make official the commercial aviation reformwhich eliminates restrictions by modifying the Aerocommercial Code and deregulating the “market”. Under Macri, an open skies policy was promoted, encouraging the entry of so-called low-cost companies, Flybondi being one of the emblems. Restrictions were also lifted, such as the minimum fare for domestic tickets, among others, which increased labor flexibility and the poor quality of flights.

*The “markets” don’t see it?: the phase of from the economic program of Milei and Caputo -of zero emission– The market began with marked nervousness. Despite the approval of the Ley Bases, with the failed press conference of the Minister of Economy announcing the transfer of remunerated liabilities from the Central Bank to the Treasury, uncertainty grew in the city of Buenos Aires. Bank shares plummeted, as did sovereign bonds, driven by the rise in country risk, which reached 1,500 basis points.

The Economist Orlando Ferreres He compared the Caputo and Bausili measure with the Bonex Plan, and in statements to Radio 10 he said that although they are different debts, “it is the same thing that Ermán González did with the Bonex Plan, because the debt that belongs to the Central Bank is transferred to the Treasury. And the Bonex were from the Treasury and became part of the banks.”

In the last month, the blue dollar rose by more than $160, placing the exchange gap with the official dollar above 50%. The same trend was followed by the parallel dollars, MEP and CCL, which went from $1,270 and $1,306 respectively in one month to being sold at $1,377 and $1,390 this Wednesday. The end of the exchange rate peace coincides with the return of devaluation pressuresis mainly explained by doubts about the economic direction. In the “markets” it is not clear how the government will get the dollars it needs – in a semester in which less foreign currency comes in from exports – if it does not manage to accumulate reserves: with this, the end of the cepo is an eternal dream. In the month of June, not only were reserves not purchased, but the balance was negative.

*Inflation: On Friday, Indec will report the CPI for June. Various private measurements confirm that the figure will be higher than that of May (4.2%), and above 5%. In CABA, inflation in June was 4.8%.

Fiscal adjustment and contractionary measures cooled the economy, lowering inflation, but at what cost? Inflation measured on an interannual basis remains very high at 276.4%, and so far this year it has accumulated a price increase of 71.9%. No salaries, pensions, and much less social benefits have had an increase close to that. This temporary drop in the general price level was at the cost of kicking forward increases in electricity, gas, water and transport. But the freed prices of services such as rent, prepaid health insurance, telecommunications, make it impossible to make ends meet. In addition, the contractionary measures that sank consumption and production – with no investments in sight – confirm the rise in unemployment.

Recession and dependency in full swing

The latest data from Indec confirm an increase in unemployment to 7.7% for the first quarter of the year, as a consequence of the government’s adjustment policies. But the unemployment rate is expected to rise to 7.7% in the first quarter of the year. unemployment and layoffs advance in the heat of the recession that could turn into a depression. In May, industry fell by 14.8% and construction by 32.6% (Indec). In June, the powerful automotive industry showed a contraction of 40.2% yoy (ADEFA). Cement shipments also fell by 32.8% yoy in June, according to the Portland Cement Manufacturers Association. The data show no signs of recovery, contrary to what the government says.

Following these trends, July started with a new wave of layoffs. More than 2,300 were announced in the State, adding to the 14,000 since Miei took office. In the private sector, Fate threatens to put 300 workers out on the street. Its owner, Madanes Quintanilla, is one of the richest men in the country. The same thing happens in a company of the Techint Group, Siat located in Valentín Alsina (GBA), which confirmed 200 layoffs.

Various surveys already confirm that unemployment is the main concern of the people, pushing inflation to second place. The social climate is being reconfigured in the face of the impact of the government’s recessionary measures, which punish working families and increase inequality. Gini coefficient of per capita family income of people was 0.467 for the first quarter of 2024. In the same quarter of 2023 it was 0.446, confirming a significant increase in inequality in the year-on-year comparison.

The economist specializing in poverty and inequality studies, Leo Tornarollireaffirmed in a tweet that “if there is a fall (in activity) and contraction, it is assumed that inequality will increase.” That is the direction of the governmentThey need dollars to meet the expiration of their foreign debt and to get out of the currency controls. In order not to trigger inflation, they are betting on keeping the economy in a slump. For example, they are looking for a drop in imports, to prevent those dollars from leaving, and that guarantees a drop in production. At the moment, they are facing the IMF’s demand for a devaluation and the end of the “blend” dollar that agricultural exporters receive, in order to try to prevent inflation from increasing.

It is a plan tied with wires where only a few businessmen win, that is why we must stop this scam of Milei, Caputo and Sturzenegger, which will only bring greater misery to the workers and vulnerable sectors. To change this course it is essential to break with the conditions of subordination and surrender that the agreement with the IMF implies, to pay an odious debt. Betting on the organization from below,


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