Fiscal sustainability and State reforms are topics frequently discussed in the context of economic development. While fiscal sustainability refers to maintaining a certain trajectory over time, it also has a political component. This means considering how much the political system is willing to support adjustment measures to achieve equilibrium. Support for these adjustments can come from various branches of government, including the Executive, Congress, or the Judicial Branch. On the other hand, State reforms aim to eliminate obstacles and regulations that may hinder the functioning of the economy.
In terms of Argentina’s fiscal sustainability, there is optimism that the country is on track towards achieving sustainable growth through fiscal consolidation efforts. The strong support from President Alberto Fernandez has been critical in this regard, with a shift towards broader political support compared to previous years when much of the burden fell on the Minister of Economy. However, improving the quality of fiscal adjustments remains a priority for Argentina. This includes reducing public spending efficiently and responsibly while restoring taxes such as Income Tax to finance adjustments more equitably.
To achieve structural fiscal balance, it is seen as necessary for Argentina to continue its focus on eliminating the fiscal deficit while making certain sacrifices such as reducing public works and delaying payments. With a potential economic recovery and restoration of taxes like Income Tax, Argentina can maintain a balanced budget without resorting to excessive spending cuts.
While achieving policy consistency during changes in government is challenging for any country, overcoming this hurdle will require successful policies that lead to economic growth and stability thereby increasing credibility and trust in Argentina. The country’s potential return to international capital markets and negotiations with IMF are separate issues but are crucial in implementing necessary economic reforms for sustainable growth. Additionally, improved international liquidity management and reduced country risk will pave the way for future market access.
In conclusion, despite facing challenges in maintaining policy consistency during changes in government, Argentina is making progress towards achieving sustainable growth through fiscal consolidation efforts with strong support from President Fernandez while prioritizing improving the quality of fiscal adjustments with approval of legislative packages by Congress and an anticipated economic recovery
