State reforms and fiscal sustainability are important topics in discussions about the economy. Fiscal sustainability refers to maintaining a certain trajectory over time, but it can also be political in nature depending on the level of support from different branches of government. State reform, on the other hand, aims to remove obstacles and regulations that hinder economic functioning.
In Argentina, achieving fiscal sustainability requires strong support from the President for fiscal measures and deficit elimination. However, Congressional approval and economic recovery are also necessary for improving the quality of fiscal adjustment. Restoring the Income Tax will help make fiscal adjustment more equitable and improve its quality.
The concept of fiscal sustainability raises questions about reversibility of measures, as past reversals have contributed to Argentina’s lack of credibility in the capital markets. To regain trust, successful policies that lead to economic growth and stability are necessary. The pension system in Argentina is undergoing changes with room for further reform in the future. Accessing international capital markets by 2025 will depend on successful economic policies and a positive relationship with the IMF. Additional funding from the IMF should not be used for exchange rate interventions but rather to build reserves and reduce country risk.
Despite recent market uncertainties, the Federal Reserve’s monetary policy stance remains unchanged. Economic recovery in the US is stable which bodes well for emerging markets like Argentina. Exiting stock markets and adopting a flexible exchange rate regime could further support economic recovery and growth in Argentina.
In summary, achieving fiscal sustainability requires strong support from government leaders while state reform aims to remove barriers that hinder economic functioning. In order to regain trust after past reversals, successful policies leading to economic growth and stability are necessary in countries like Argentina where pension systems are undergoing changes and accessing international capital markets is crucial for future development.
Additionally, there has been recent debate about whether flexible exchange rates or stock market exits would better support economic recovery and growth in emerging markets such as Argentina. The Federal Reserve’s monetary policy stance remains unchanged while recoveries in developed economies like the US could benefit emerging markets.
Overall, achieving fiscal sustainability is an ongoing challenge that requires careful consideration of political factors as well as effective implementation of policies aimed at removing barriers to economic growth
