Economic indicators have become a consolidated reality

Just a month ago, when one dared to speak of signs that the Argentine economy was finding its way, it could still be debated whether these were incipient signals. Today, those perspectives are confirmed. There are no doubts left. The signs of growth and economic improvement have become a reality.

It is a marvel the state we are in, when we think that in December 2023 this administration inherited a dozen and a half nuclear bombs ready to explode from the very first moment. There were due dates for quasi-fiscal debt (concentrated in Leliqs for one day), fiscal debt, futures, and puts from the Central Bank that literally expired every day. There were tens of billions of dollars that had to be faced.

Not only did we get out of that. Then the economy was stabilized in a year and a half. Despite the blows of legislative nonsense and destabilizing maneuvers that we all know.

The three pillars of the new economic regime

But what really happened in Argentina, and I believe not everyone perceives, is that there was a genuine change in the economic regime. That change had three main pillars:

 The first was fiscal. It was not simply about fiscal surplus or recovering fiscal solvency. Many spoke in the past about recovering that solvency, but the strategy always ended up increasing state revenues, that is, increasing the burden on the people. Here, what was truly revolutionary was achieving solvency from day one through spending cuts. This meant less fiscal burden for the people and resulted in us having a primary surplus every month since this administration took office. We have a primary surplus and we have a final or financial surplus. All of this means that debt, instead of increasing, is decreasing. This is an economy in de-leveraging.

The second pillar was financial and monetary. The currency control was eliminated, despite all that was said about it not being possible to remove it. At the same time, dollars are being bought at a pace like never before. Meanwhile, country risk has decreased, ratings have increased, and maturities have been cleared.

The third pillar was competitive opening: opening up to external competition and also opening internal competition, strictly respecting price mechanisms. The Argentine economy was blocked by a multitude of regulations, hyper-regulations, and micro-regulations that created tolls and kiosks of different types in the path of those who wanted to produce.

There were even rules that literally implied the prohibition of production. Without a new Glacier Law, the reality of Argentine mining would be a fiction.

The search for competition and openness led to a remarkable phenomenon: Argentine trade is at a record high. In decades, there has not been such a participation of foreign trade in Argentine output. Additionally, we have a growing trade surplus since the first month. It was said that to compete a very high exchange rate and trade barriers were required, which proved to be false.

We are experiencing a record trade surplus, and industrial exports, which were supposed to be the most affected according to that theory of the need for a super high dollar, are absolutely at a record with this dollar.

The exchange rate is well below the upper floating band. From the first day the currency control was lifted, many claimed it would surpass the upper band. Far from that, today it is actually quite distant.

Surpluses and a new economic geography

So we have a primary surplus, a final financial surplus, and a trade surplus. These are three surpluses. And I can add another: this year we will have a current account surplus. Argentina is flooding with dollars. Dollars are pouring in because there is an extraordinary investment process and because there is once again confidence in the currency. We are in a different economic geography.

The increase in demand for pesos is allowing not only for the fall of inflation. It is also reflected in the increase in the supply of dollars and in a flourishing of different sectors of economic activity. It is increasingly becoming less true that there are some sectors doing well, but many doing poorly. It is logical, because those sectors with the most growth potential pull the rest along.

We also have a unique international context for Argentina. But it is not just that the planets aligned. We sought to have the planets aligned. It was about choosing the right alliances, choosing the path of trade and multilateral and bilateral negotiations, seeking to trade everywhere.

A virtuous cycle of investment, trade, and growth

There will increasingly be greater access to direct and financial investment. Hand in hand with the fall of country risk, which I consider inevitable moving forward. If the course is maintained, we will see a growing flow of capital. Direct investment is already being perceived and financial investment will also arrive. All of this will accelerate growth. That is why we are entering a virtuous cycle that is unlikely to reverse.

We are entering an irreversible process, with a consolidated economy; with cleared maturities, with external backing, and with a fragmented opposition orphaned of a leader.

The reforms of increasing returns that Congress must approve

In the face of this change, legislative work is central. My job is to materialize the structural reforms that Argentina needs and that we have been longing for and working on for some time with President Milei and the Executive Power. From day one, I told my colleagues that there should be zero personal creativity here.

We are a small caucus within the Senate: twenty out of seventy-two members, even counting usual allies. We are clearly in the minority. However, we have managed to build a good relationship with allied forces and, on that basis, we have achieved very important things. In that framework, the reforms of increasing returns that the Executive Power sent to Congress must be understood. They are eliminating obstacles, enabling investments, and allowing each advance to enhance the next.

The labor modernization was a clear example. Some may say it could have been better. Yes, of course it could have been better. But when one is sitting in the position we are in, one sees more clearly that politics is the art of the possible.

What was achieved with labor modernization was a cultural triumph, not just a legal change. We began to dismantle something that had, at a minimum, eight decades, during which the only thing that had been done was to increasingly debase the Argentine labor regime.

There is also the Hojarasca Law, which has already received a report and is ready for discussion. Its purpose is to remove that accumulation of norms, regulations, and micro-regulations that have turned into tolls and fees.

We will also discuss the project for the inviolability of property rights. It seems unbelievable that a natural right, enshrined in the Constitution, needs a particular law to reinforce it and make it respected. But it has become illusory due to state and judicial tolerance towards usurpations and the slowness of evictions.

It has also become illusory in expropriations, when a good is declared of public utility and then nothing happens for years. Meanwhile, the owner continues to pay taxes and is deprived of the exercise and disposal of their property.

In addition, there are the Glacier Law, biofuels, pending bills, mental health, front labeling, and other projects. We also managed to resolve the issue of the last two major creditors with lawsuits pending since 2001.

For all these reforms, regarding the Executive Power and our caucuses in the Legislative Power, we are facing a process that is practically without historical precedents.

The signs have become reality. The economy is stabilized, consolidated, with a primary surplus, financial surplus, trade surplus, and the prospect of a current account surplus. There is demand for pesos, falling inflation, dollar purchases, decreasing country risk, record industrial exports, investment, and a growing flourishing of activity sectors.

There is much left to do, especially in Congress. But we are no longer just discussing an expectation. We are witnessing a process of stabilization, consolidation, and growth that is supported by concrete decisions. The reforms sent by the Executive Power must allow that process to advance, deepen, and generate increasing returns. That is the task ahead of us.