The Economist Alfredo Zaiat explained that the management of Javier Milei She reaches the end of 2025 without having achieved her main economic goals, pointing out that “the third year in office usually sees a disillusionment with governments.” In dialogue with Fontevecchia modefrom Net TV And Radio profile (AM 1190) said: “This third year must necessarily be defined at the level of expectations and perspectives.”
Alfredo Zaiat holds a degree in Economics from the University of Buenos Aires. He is a journalist, editor and author. He hosts his radio show Blank Check. He also works with El Destape, Futurock and Signal T.
Melconian warned that there would be no single-digit inflation with Milei and focused on the exchange rate system
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How do you see the economy in 2025, with this kind of roller coaster ride we’ve had?
From an economic perspective, almost none of the goals were achieved. I know that I live a little against the grain of a kind of consensus, but at the level of the inflation rate, Javier Milei He had said it would be 0% in August, or that it would start at 0% and end at 2.5% in November. It is expected to be similar in December and has been increasing in small increments for five months, despite the use of the exchange rate anchor, the salary anchor and the fiscal anchor. Also at the level of public spending, i.e. domestic demand.
On a financial level, look at how you treat Luis Caputo to raise the dollars to pay off the debt due on January 9th. He could not reduce country risk to gain access to the international financial market. With the exchange rate system, he has already had to change it twice. First, the creep threshold was reduced from 2 to 1% to bring it down to zero. Later, on April 14 this year, this was changed following the agreement with the International Monetary Fund (IMF)in an alternating band. And now this exchange rate band no longer exists beyond the formality, as the cap is adjusted in view of the past inflation of the previous two months. Can you imagine that the ground doesn’t have logic that says that if everything goes up, it will also adjust and sink?
Regarding the budget question, there is a big simulation here in which there is an almost universal complicity in the fact that there is a budget balance and even a financial surplus. The financial budget surplus is deducted, it is an accounting entry as it does not include the payment of interest on the debt. If you don’t include a basic expense, namely interest on the debt, you get this financial surplus. Even the IMF is very cautious in putting an asterisk in the signed agreement. This asterisk links this reservation to the issue of budgetary balance.
Later in the year there were two financial bailouts, not one but two: one from the IMF for 20 billion dollars and the second directly from the US Treasury Department. Donald Trump, as a direct political and financial intervention in the election campaign that delivers results 2.5 billion dollars.
Economic activity is stagnating. Everything is negative except for the oil, mining and financial intermediation sectors. In addition, formal jobs are being destroyed. And all there is is a growth in informal, fragile and informal employment, and at very low salaries. Salaries did not rise, they did not rise in real terms, but they fell. The majority of families are in debt and defaults are increasing. Do you think this will continue?
My question is why. Why is the general perception – I don’t know if it’s tolerant or even more so – optimistic in many cases in the face of hard data like you provide? Is it a question of people adapting to the existing situation and do they have to take their subjectivity into account by repressing and feigning dementia? Then to what do you attribute this difference in the correlation between hard facts and perception in general, at least in certain sectors?
I would make a difference. On the one hand, I believe so, if the polls are to be believed Between 60 and 70% of the population believe that the economy is not doing well. It doesn’t do similar analysis as I do.
Maybe even 80 or 90%, but a significant percentage believe they are on the right track.
That’s another matter. That’s what you’re saying about the intersection of subjectivity. If you like, in a year, when 2026 comes to an end, we will see whether this expectation is fulfilled or not. And I think that this honeymoon period will be exhausted there, because that’s how the political, social and economic dynamics work in almost all countries, but what I know best is Argentina. This third year is important to define expectations and perspectives.
Dissatisfaction with governments usually becomes apparent in the third year in office. You saw it (Fernando) De la Rúayou saw it (Mauricio) Macriyou even saw it Alberto Fernandez. I mention three governments, some of which failed to finish and others which failed to re-elect. This third year is already asking the question: “I have the expectation that I will get better.” I don’t do future research, I just see the hard data and trends and they show no signs that things will improve. So what I’m saying with this hypothesis is that the idea that people will get better is gradually dissolving.
Then there is 30% and a hard core associated with the economic power that supports the government. We can describe the hard core of 30% very synthetically and even schematically, and I think it has nuances, but it is what right-wing, anti-Peronist, conservative governments always support. It’s what you mentioned before, this third party that will support no matter what (Carlos) Menemto Macri, to Milei, to every representative of this political movement.
According to data from Di Tella University, trust in the Milei government closes 2025 at a level similar to November
And then the hard core of economic power. Despite the hard data also in the balance sheets of a large part of the companies, not all, because hydrocarbons, mining and financial intermediation are a separate chapter, the banks are making losses because they delivered quite poor, rather negative results in the third quarter. The clearest symbol of these contradictions is Paolo Roccathe Techint group, where one has to assume that its oil division is doing well and supporting it, and the steel industry division, the industry linked to the domestic market, is doing poorly. There you will find Paolo Rocca who explains that he agrees with the government, that he agrees with the labor reform, but asks for selective protection, a protection he calls “Intelligent protection”.
So this contradiction is playing out, and in this contradiction it is somewhat related to the 30% that I mentioned to you. The sectors of the most concentrated economic power in Argentina want to produce reforms that are irreversible, both reforms at the regulatory level and reforms that occur simply because of the dynamics of economic development, such as deindustrialization. Why do I say irreversible? Because they have achieved it at the level of Argentine structural change with the military dictatorship, with the 90s, with the short period of Macri and have now found a leadership like that of Milei, capable of tackling political projects in a very schematic way, distributionist, national and popular.
This industry in Milei is the vehicle. It’s not that they like their ideology or that they support anarcho-capitalism, but it is what it is the vehicle for the structural change they have wanted for several decades. So this is where you are when you try to understand why Paolo Rocca, whose internal market, his sector, the heart of the Techint group, is being destroyed, does not take an openly oppositional position.
To this third-year syndrome we can add that of Cristina Kirchner in her second term. This syndrome determines the possibility of re-election or not. And this is where it is determined whether the person is a lame duck or not and whether the opportunity to be a lame duck is perceived. That is, in the case of Cristina she could not be elected because she had already been president twice, but in the case of Macri, De la Rúa and Alberto Fernández it was very clear that they did not have this possibility. There is a point at which politics plays into the economy.
Yes, sure. And you gave the example of Cristina, and it seems to me that it also goes a little against the grain of political-economic analysis. I think Cristina recognized it there. Many will say no and say that this is one of his mistakes, but I think he realized it. Because if you think about the last two years, who was the Minister of Economic Affairs and how was the management of the economy arranged? I don’t know if we have you there or it was cut, but essentially it has to do with the fact that it started with a devaluation in early 2013 and was the Minister of Economic Affairs Axel Kicillof.
And we always say that in this period Kicillof showed that he was more orthodox than what is attributed to him, because he began with a devaluation, with an approach to Paris Clubto ensure that Argentina can return to international markets. This means that we can add that Kicillof, who has been Minister of Economy for the last two years, as well as Perón in his second term in the middle of the last century, where he also became a little more orthodox and sought rapprochement with the United States.
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