How much does Argentina's new economic plan differ from the previous one?
Two weeks into Argentina’s new economic plan, which received strong support from the IMF, we have a clearer picture of what we can and cannot expect from it. Three things stand out. First, it is not the third phase of the same plan, as the government claims, but a new plan that was introduced because the previous one was faltering. Second, the policy corrections introduced by the government did not go deeply enough. Third, if the goal of the government is to put Argentina on a path of sustainable growth, more forceful and decisive corrections along the same lines and in the same direction will be needed after the election.
At issue is the incapacity of both the old and the new plans to foster international reserve accumulation, which should be the main objective of the government. In this report, I first describe the main policy changes embedded in the new plan and then explain why I think they are insufficient to truly stabilize the economy and are unlikely to last after the election is over.
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