Cavallo: Milei's economic model is hard to understand, lacks reasonability

Former Economy Minister Domingo Cavallo has sharply criticized President Javier Milei's economic roadmap, stating it is "difficult to understand" and lacks reasonability. Cavallo attributed this to the government's "constant and unnecessary political confrontation."

Cavallo urged the administration to be more proactive in eliminating distorting taxes that hinder economic dynamism, singling out agricultural export taxes as a "true aberration." He recalled a discussion with Minister of Deregulation Federico Sturzenegger about the "Incentive Regime for Large Investments" (RIGI) law, designed to attract foreign capital. Sturzenegger reportedly told Cavallo that within two years, all companies would benefit from RIGI, a claim Cavallo seemed to question.

Reflecting on his own time in government, Cavallo suggested that the early 1990s offered more freedom for capital movements with fewer controls. Regarding fiscal matters, he emphasized analyzing public spending levels first and reiterated his belief that lowering taxes would stimulate sectors currently in recession.

On Milei's re-election prospects, Cavallo stated that if the president advances reforms that gain broader societal support for being efficient and equitable, his chances of reelection in 2027 would "increase exponentially." However, he theorized that a Peronist victory, particularly under Kicillof, would lead to a discontinuity in economic policy, highlighting the risk of economic program continuity depending on election outcomes. Cavallo also alluded to alternative liberal options with a different political style than Milei's confrontational approach.