Argentina : The Next Steps

In this note, we provide a roadmap of the administration's goals and policy actions in the coming months and quarters, as well as the risks involved. The administration has made substantial progress, including reducing the monetary overhang, adhering to a prudent fiscal policy, and partially making the nominal exchange rate more flexible. These actions have anchored fiscal expectations, started to normalize relative prices, reduced inflation from triple to double digits, and moderated inflation expectations. However, the path to becoming a stable economy that grows steadily rather than experiencing boom-and-bust cycles requires decisive policy actions. These include buying international reserves, as recommended by the IMF, liberalizing the exchange rate regime, continu ing to dismantle rent-seeking schemes implemented by previous Peronist governments, improving the functioning of domestic markets (including the labor market), and guaranteeing property rights to attract investment.