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🇦🇷 Argentina /Economy & Trade

Domingo Cavallo: “Growth at 8%, not 3%, matters more than lower inflation”

From Clarín · () Spanish

Translated from Spanish and summarized by DistantNews. Read the original for the full story.

At a glance

Interview Named sources Context piece
  • Former Economy Minister Domingo Cavallo says Argentina’s market-oriented policies could be reversed after 2027 if voters become disillusioned with the lack of improved living standards.
  • He argues that President Javier Milei must stimulate growth and make the benefits of lower inflation felt by households, without resorting to a cash-spending plan.
  • Cavallo says a future interventionist government would still face fiscal, debt and global constraints and would need to act pragmatically.

Domingo Cavallo says Argentina needs more than a fall in inflation. It needs a recovery strong enough for people to feel their living standards improving, with growth closer to 8% than 3%.

The former economy minister warned that Javier Milei’s market-oriented program is not irreversible after 2027. A victory by someone who does not commit to market policies, openness and stabilization could create a risk of reversal. Even an administration led by Buenos Aires Governor Axel Kicillof, Cavallo said, would face circumstances forcing it to retain a market economy, or something close to fiscal balance, because of debt obligations.

But he said the temptation of populism within part of Peronism could still send Argentina off course. The risk would grow if Milei’s plan failed to produce a stronger sense of well-being among the people who voted for him, including those motivated by the hope of significantly improving their situation.

Growth at 8%, not 3%, matters more than lower inflation.

· Domingo CavalloCavallo’s headline argument that economic expansion and improved living standards should take priority alongside disinflation.

Cavallo rejected the idea that the government should simply launch a cash-spending program. Lower inflation could eventually benefit households, he said, but recession in parts of the economy and weak prospects for employment and incomes are already creating dissatisfaction.

He argued that Milei’s success depends largely on whether people perceive the gains from his program. A more interventionist government would also need to understand the constraints facing Argentina and the world, rather than rely solely on ideology. Cavallo cited former Spanish Prime Minister Felipe González and former Brazilian President Fernando Henrique Cardoso as examples of left-leaning leaders who governed pragmatically and kept their economies open.

Cavallo said Milei had understood fiscal issues and acted correctly on them, but the interview excerpt ends as he begins to explain whether the president is pragmatic. The article’s description says Cavallo is urging the government to remove currency controls and open the foreign-exchange market to boost activity and reduce risks before the 2027 elections.

Milei must restore families’ hope of improving their quality of life, as he did in 2023.

· Domingo CavalloThe article’s description summarizes Cavallo’s warning about public expectations ahead of the 2027 elections.
About this summary

Originally published by Clarín in Spanish. Translated, summarized, and contextualized automatically by DistantNews, with a note on how the source frames the story. Not individually reviewed before publishing. How this works.

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