Buenos Aires — In the run-up to Argentina’ primaries this Sunday, the debate among the country’s leading presidential contenders has centered around the most urgent issues for the local population. With inflation running close to 120% and parallel exchange rates surging, those concerns have one common denominator: the economy.
Four of the main candidates -Horacio Rodríguez Larreta, Patricia Bullrich, Sergio Massa and Javier Milei- know that if they win the presidency, they will have to deal with sterner requests for fiscal and monetary adjustment from the International Monetary Fund (IMF), and a Central Bank (BCRA) with net negative reserves.
These are their economic proposals to bring Argentina back onto the path of growth and development.
Horacio Rodriguez Larreta’s (Juntos por el Cambio)
Horacio Rodriguez Larreta, Buenos Aires City mayor candidate for the Juntos por el Cambio coalition, proposes dismantling currency controls and unifying all exchange rates. He believes in the need for stability and predictability in public and economic policy. Larreta’s official website states, “On the first day, we will dismantle the current system that is affecting the economy’s performance. Within the first year of the government, we will have a single and free exchange rate.” He also emphasizes an independent and anti-inflationary Central Bank and aims to prohibit the monetary authority from financing government deficits.
Rodríguez Larreta points out that the Central Bank’s transfer of 2.7 trillion pesos to the government in 2022 resulted in the highest inflation in the last 30 years. He intends to modify the BCRA’s Organic Charter to address this. He also plans for the end of monetary issuance to lower inflation and protect salaries, aiming for real wages to be higher at the end of his term.
Patricia Bullrich’s (Juntos por el Cambio)
Patricia Bullrich, Juntos por el Cambio’s second candidate, advocates for reforms that could improve economic incentives for businesses and investors, restore fiscal solvency, and gradually rebuild the country’s international credibility. Bullrich aims to eliminate currency controls and achieve “tax decontamination.” Her economic advisor, Luciano Laspina, even suggested the possibility of seeking a new loan from the IMF to shield the government against runs on the peso.
Regarding the complex currency situation, Bullrich has rejected a dollarization proposal for the economy put forward by her rival Javier Milei, with whom she may have considered an alliance in the early stages of this electoral campaign. Bullrich favors a “bimonetary” approach as a better option for Argentina, which would legalize more official uses for the dollar, while upholding the peso for most transactions. Bullrich also emphasizes that tackling inflation requires reducing the budget deficit.
Sergio Massa’s Proposals (Unión por la Patria)
Sergio Massa, still serving as Minister of Economy while running as a candidate, has focused on fiscal balance, trade surplus, competitive exchange rates, and state-led socially inclusive development. He believes the challenge is to further increase income stability and has overseen an attempt to stabilize the economy since August of 2022. He has allowed the peso to devalue at an accelerated pace, especially in recent weeks.
Massa emphasizes boosting and upholding current exports, particularly from the agro-industrial sector. He intends to further renegotiate the current program with the IMF.
Javier Milei’s Proposals (La Libertad Avanza)
Javier Milei, a presidential candidate for La Libertad Avanza, offers an extensive platform with radical economic measures. His plan includes total dollarization to curb triple-digit inflation, labor reforms, privatizations, reductions in employer burdens, and replacing severance pay with an unemployment insurance system.
Budget cuts could amount to up to 15% of GDP, and would include the elimination of several ministries, as well as publicly led investment in infrastructure.
Milei advocates for the gradual elimination of social welfare programs, federal revenue sharing, reduced public spending, and tax reforms. He proposes the elimination of the Central Bank and currency competition, allowing citizens to choose the monetary system or full dollarization.
In the lead-up to the PASO elections, the candidates’ economic proposals are sparking vigorous debates in Argentina’s political landscape.