Argentina is experiencing a very special economic moment, in our book The music changes, we must change the step, we reflect on how we moved from a closed economy to an open economy, from fiscal deficit to fiscal surplus, from multiple exchange rates with outrageous gaps to a single exchange rate, from a total clamp to only a clamp for legal entities, and we could continue the list of many changes that have made the way of doing business diametrically opposed to the past.
In the Argentina of the past, inflation was in the triple digits, devaluation was horrifically high, and financing was at negative rates; currently, inflation is decreasing towards a single digit in the next 24 months, there is a stable exchange rate, and financing is at positive interest rates. All this correlates to the fact that it is no longer profitable to maintain high stocks, to work with other people's money, and the path ahead is to compete, therefore we must work on reducing costs, invest in capital goods, be efficient, productive, and have the business measured.
It is interesting to analyze the foreign exchange market of the Central Bank to gauge the change our economy has undergone. In the first 29 months of Javier Milei's government, the current account surplus was U$S 2.705 billion, while in the 29 months prior to December 2023, the deficit was U$S 3.258 billion. Argentina has a fiscal surplus, a current account surplus, and financing needs; there is no reason to think about a devaluation of the peso.
The difference between the collection and payment of imports is brutal; currently, we have a positive balance of U$S 49.976 billion, while in the previous 29 months, the positive balance was U$S 35.647 billion, a difference of U$S 14.329 billion.
The financing needs in the 29 months prior to Javier Milei's assumption were negative at U$S 16.227 billion, while now the balance is positive at U$S 14.146 billion, an improvement of U$S 30.373 billion.
Financial loans, debt securities, and lines of credit from private companies through ON and provinces with bonds have a positive balance of U$S 28.094 billion under Javier Milei's government, while the balance 29 months earlier was negative at U$S 12.407 billion, giving us a difference of U$S 40.501 billion.
The support from the IMF and international financial organizations has been explicit under the current government, as the balances of disbursements total U$S 19.465 billion, while 29 months earlier they totaled U$S 6.343 billion.
Clearly, Javier Milei's government has managed to increase the balance of trade in 29 months, indicating that there is no exchange rate lag, as there is a brutal change in the economic structure. In 29 months, agriculture contributed U$S 89.721 billion, oil U$S 18.890 billion, and mining U$S 14.000 billion. Individuals in the same period purchased U$S 59.262 billion, indicating that many have not yet changed their step.
