Orlando Ferrers: “I am optimistic with doubts”

In conversation with Fontificia modeby Net TV and Radio profile (p. 1190), Orlando Ferres He stressed that he remains “optimistic, although there are doubts” about the future of the economy, although he noted that the current scenario does not show the reactivation that some official figures indicate. In addition, he stressed that the lack of credit and high interest rates are slowing the recovery.

Orlando Ferrers graduated in Political Economy from the University of Buenos Aires. In 1989, he served as Secretary of Economic Coordination in the country’s Ministry of Economy. In 1991, he founded Orlando Ferreres y Asociados Sociedad Anónima, an economic consulting firm. He is the president of the North-South Foundation, an entity dedicated to analyzing economic and social reality. He was a member of the Promotional Group of the Austral University and a founder and current board member of the Center for Microeconomic Studies in Argentina.

Caputo told British businessmen that “2026 will be an amazing year.”

At the moment, it is being discussed, based on the discrepancies regarding the credit that banks will extend to Argentina to repay debts due next year, how important is next year’s debt repayment situation or not?

A loan of $20 million was planned, but it was later said that it would be reduced to $5,000 million, which the banks could afford with the guarantees Argentina could offer and the risks the country faced. That is, more or less than 630 points. Obviously, Argentina does not have its own reserves. Most of them are borrowed or by International Monetary FundFor swap with China, for swap with the United States, or for loans from some banks. It has few reserves, but we have gold, which is worth a lot, and this helped us a lot in increasing the net reserves. But Argentina does not have the means to pay all these benefits if it does not receive more money from abroad. And I think they are now talking with the banks, with JP Morgan and Citi and others, to see if it is possible to find a way out for these five thousand million people or eventually more than that. What I don’t really know is how it’s going to go. Yes, companies in Argentina do more or less, because they require some precautions so that they do not have to close companies and do not have to fire people. This is a relatively difficult situation in economic development. So the two things get a little mixed up.

Do you think, at the same time, that the lack of confidence is due to the belief that economic policy is not giving the expected results in growth?

Of course, so far no results have been given. Let us hope that after December 10th, when a new number of representatives, senators and allies are obtained, labor, tax and other reform laws can move forward and that this better reflects the country’s situation and that banks will be more willing to lend to it. But, for example, countries like Brazil, Uruguay and Chile have 200 country risk points and we have 640. The difference is still quite noticeable, though Buenos Aires City Government He owns $600 million at 7.8% interest Which could be followed by some other governorates, as it is not easy to obtain a loan from the private sector. It’s very difficult.

What you’re saying is that it’s also difficult for companies to go into the market to roll over their debt, even though in the last month and a half there have been a number of very high-profile debt issues?

There were a fair number of ONs, which are loans to private companies, for a fair number of dollars, and the company I work for, which is… Argentina airportsachieved a fair number of results, although the interest rate was interesting. The private sector does get some money from private banks very well, with some restrictions of course, but it pays a slightly higher interest rate than in the United States.

What fees were paid?

7.8%.

The same city as Buenos Aires.

Exactly, as it is.

There is a huge controversy because INDEC has just announced that the economy grew by 5% compared to last year, while at the same time the public perception is that we are in a recession, with difficulties in realizing economic recovery. What do you think is happening to the economy, and does the 5% growth calculation given by INDEC as the latest figure catch your attention?

Yeah, it seems a little high, obviously. We have the monthly calculation of economic activity, and the general activity index that we will publish this afternoon gives us less. This means, The activity does not reactivate as expected. This is because of the lack of credit, and because there is also a certain delay in credit payments, both from the productive sector and from individuals with credit cards. Obviously the problem is that the market is not progressing as expected, due to the increase in the interest rate caused by the government itself, although it is now trying to lower the reference rate from 22 to 20, and other slightly higher rates, which is still very strong for the economy, which is expected to see a 30% increase in the CPI this year. The negative interest rate that will be there is very high, because it is approximately 8 to 10 points.

The economy is moving at two speeds: winning sectors advance by 11% and lagging sectors decline by 9%.

How did you correct the forecasts for 2026 after the elections, the decline of the dollar, the emphasis on maintaining the ranges, and these disturbances regarding the fear for the amount of foreign currency to pay off foreign debts next year and this lack of circumstantial growth in the economy?

It’s more complicated. We calculate the inflation rate at 15% by 2026From January to December, economic activity will grow 2.5%. In other words, there’s not a lot of activity. This is because there is a huge and immediate lack of investment. In addition to the implemented RIGI, which is implemented on a case-by-case basis, there must be a more or less generalized investment trend that leads to increased employment and increased real wages, which depends on worker productivity. That’s roughly our 2026 summary.

You created your consulting company in the early 1990s. At the same time, I was part of the initial economic team of Carlos Menem’s government. Many comparisons have been made between what Miley and Caputo did with what Menem and Cavallo did. However, by the 24th month, the transformation plan, as we are today, had achieved impressive growth. GDP growth was 9%, today we are talking about 2%. What comparison do you make between the economic policies of those years and those?

This was real hyperinflation. Increase in July 1989 196.6%This means, 46,500,000% annually. Obviously it was very difficult to make decisions in that environment. We have drawn up a plan of 150 actions, which Miley also has now, which is to take regulatory actions, reduce public spending, improve the central bank’s balance sheet and other actions that are also giving good results. But Congress needs to approve these measures. Obviously, if we have a labor law like Uruguay’s, then… They only pay up to 6 months compensation for firing someoneThings could be very different for investors who ask about this kind of thing. They also ask about taxes, economic activity and whether Miley will be re-elected in 2027. The questions we all ask ourselves are also asked by investors, because they have to risk their money in the country.

The difference is that Menem had a majority in Congress in both chambers at the time and could implement reforms, while Millie could not? There will be a difference, not in economics but in politics.

Of course, in agreement with Alfonsin, who would have voted in favor of the various laws. I remember that I suggested to Menem to vote in favor Reform the state’s economic emergency law Jointly between members of the Senate and Representatives, but he did not want to do so because he did not reach that result, and the first polls he conducted did not give results. So we had to enact those laws, which were the great reforms of 1989, where privatizations were implemented, subsidies were removed, and so on. It became a more liberal country despite the difficulties of hyperinflation that existed.

Finally, are you optimistic?

With doubts. I am an optimist with doubts. If things go well, the country can do very well and can grow more than we are saying. Let us hope that this is the case and that we have a high growth country.

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