By Jorge Otaola
BUENOS AIRES (Reuters) – Argentina’s next government will have to cut spending and stop printing pesos to get the inflation-wrecked economy back on track, executives and other members of the country’s business community told Reuters.
The country holds its presidential election on Oct. 22 amid triple-digit inflation, a dramatic erosion of the peso currency, and with two in five people living in poverty.
The three leading candidates are each running on their own remedy for the ailing economy: radical libertarian Javier Milei’s dollarization proposal; a bi-monetary system proposed by conservative Patricia Bullrich; and ruling party candidate Sergio Massa’s plan to stick with the peso.
The candidates mostly agree, however, on reducing the government’s large fiscal deficit, like many business leaders.
“We Argentines must stop arguing about obvious things like public spending,” said Javier Goni, CEO of agribusiness company Ledesma. He said cutting state spending is a must.
Executives are also calling for greater labor market flexibility, citing worries about the legal risks and high costs of layoffs, and a unification of Argentina’s disparate currency exchange controls, following a rise in the difference between the official and informal rates to 200% earlier this week.
“Currency controls have taken away our ability to pursue new investments,” said a steel firm executive who asked not to be named.
Another recurring demand from executives is better access to credit to spur business growth.
The election is playing out as the government struggles to service its $44 billion loan with the International Monetary Fund.
The IMF forecasts that Argentina’s economy will shrink 2.3% this year, with central bank reserves in the red after a historic drought trimmed $20 billion from key agricultural exports.
“The context is complicated, but what is going to come after the elections is also going to be complicated,” said Oscar Andreani, owner of a private mail firm of the same name. “We are in a deep hole and getting out is going to be traumatic.”
(Reporting by Jorge Otaola; Writing by Brendan O’Boyle; Editing by David Alire Garcia and Leslie Adler)
