Pablo Goldin: "The Central Bank is trapped monetarily, it perceives the problem but cannot find a way out"

For Pablo Goldin, director of MacroView, the problem with the economic program lies not in what it has generated, but in what it lacks. "It is urgent to reactivate, it is very important," defines the authority within the consultancy headed by Rodolfo Santangelo, which also includes Carlos Melconian.

The analyst, with a long career in the local macroeconomic context, emphasizes the importance of recognizing some of the virtues of the official scheme - exchange rate stability, fiscal balance, manageable debt, and a slowdown in inflation - but points out a flaw that has persisted since the beginning: "It has reactivated little." To the extent that he projects a growth of less than 2% of GDP for 2026.

The diagnosis, according to Goldin, is monetary. In the Argentine economy, about $180 trillion circulate, while the average over the last two decades hovers around $220 or $230 trillion. "There are about 50 trillion pesos less, in constant currency, than there were in other moments of reactivation," he calculates.

This is despite the fact that the Central Bank of the Argentine Republic has purchased around $14 billion this year and issued about 20 trillion pesos, but ended up absorbing almost everything: only $5 trillion remained in circulation. Therefore, he speaks of a monetary authority that is "trapped": "it sees the problem but cannot find the way out," Goldin asserts.

The result, he argues, is a divided economy: 15% to 20% that invoices in dollars and functions, and 80% tied to the internal market - commerce, construction, industry, services - that remains stuck. Neither mortgage loans nor targeted injections are sufficient, he warns, because "no very specific and sporadic thing" can replace a central bank that remonetizes. Below is the complete interview in Ámbito.

Q: What level of urgency does the idea of reactivating activity have?

Pablo Goldin: It is urgent to reactivate, it is very important. It is one of the pillars of a successful economic program in Argentina.

If this program remains as it is, somewhat orphaned of reactivation, it is hard to imagine it being sustainable over time, due to the very macroeconomic endogeneity. For one to see a sustainable and lasting economic program in Argentina, which strengthens over the years, one of the conditions it must meet is to be capable of reactivating.

This program has some virtues: relative stability in the external and exchange sectors, fiscal balance, a fairly manageable public debt financing, and it has achieved some reduction in inflation, which is another ingredient for a program to work here. But it has one flaw: it has reactivated little. And it is not that it has reactivated little this year; since its inception, it has reactivated little.

If we were in a country that has been growing 3% or 4% annually for the last 15 or 20 years, having one or two years of adjustment, growing 1% or 2%, can be managed, because you come with a more or less good performance. But in a country that has been stagnant for 15 or 20 years, with a per capita product 10% below that of 2011, telling someone "I promise you that with this program you will grow 2% per year" is little, it falls short, it is very stingy. So it is an important issue, not only politically and socially.

The problem is that this program is stuck in reactivating little. I do not believe that this year we will reach 2% growth of the product, which is very little for Argentina. And in the three years of this Government -2024, 2025, and 2026- it accumulates at most a 5%, with a negative 2024 and positive 2025 and 2026. It is stuck there.

"There are $50 trillion less than there were in other moments of recovery"

Q.: What is hindering growth?
A.G.: It is hindered because this economy lacks something that other successful programs in Argentina did not lack, despite the significant differences between Menem and Kirchner: the possibility of having a lot of money, many pesos in the economy, without inflation skyrocketing and without the dollar escaping.
How can it be that magic where the Central Bank issues pesos, but inflation decreases and the dollar does not move or cause unrest? Well, it happened to Menem during the years of convertibility and it happened to Néstor Kirchner between 2003 and 2008, more or less. These are moments when the Central Bank has that possibility: when a program is successful, people trust for a while, the inflation rate decreases, the level of activity recovers, and the exchange rate does not create noise. That is what is missing in this program.
If you look at the amount of pesos circulating in the Argentine economy today, in circulation on the streets and in bank deposits, there are 180 trillion pesos.
Is that a lot, a little, more or less? The reference is that the average of the last 20 years in Argentina is around 220 or 230 trillion pesos. And in moments of strong and widespread recovery, the difference is even greater: today there are about 50 trillion pesos less, in constant currency, than there were in other moments of recovery. In other words, there are few pesos in the economy. It is stuck there.
Q.: So, if there are no pesos, it is an economy trying to reactivate in dollars...
A.G.: That is 15% or 20% of the economy. Specifically, the net exporting sectors of Argentina, those that bill in dollars, incur debts in dollars, issue negotiable obligations in dollars, and operate with dollars, are doing well. Why? Because there are dollars. Paradoxically, in Argentina these days, there are dollars: exports are expected to exceed $100 billion this year and next year as well. Dollar deposits in banks are high, dollar credit is high, and you see that many are borrowing in dollars. But there is 80% of the economy that operates more with pesos, that depends more on the internal market and not so much on dollars, and that is what is stuck.
Commerce is doing poorly, construction is doing poorly, industry - which is basically internally focused, with exceptions - is doing poorly, and a large part of services is doing poorly. They are even at a level of activity lower than they had before this government took office.
The issue is there: credit has stalled, delinquency has increased, and that has further stalled credit. And the Central Bank is clear about it. Starting January 1, 2026, it said: "I will start buying dollars and issuing pesos to remonetize the economy, so that the economy has more pesos." It will try to do that because it sees the problem. But something failed. What failed? If it bought a lot of dollars: from January until today, it will have bought about $14 billion. Do the math: $14 billion at a dollar of 1,400 or 1,500 pesos during this time gives you 20 trillion pesos issued. If in constant currency there are about 50 trillion missing and it issued 20 in eight months, we are doing well.
However, at the end of the day, all that money it issues is reabsorbed, either with the Central Bank placing bonds or with the Treasury overplacing debt in pesos. Through different financial mechanisms, the Central Bank validated that of the 20 trillion it issued, only five remained in circulation. Almost nothing.

"The Central Bank is monetarily trapped, perceives the problem, but cannot find a way out"

Q: So far, the priority has been one: to reduce inflation...**
A: The Central Bank tells you: "Look, I'm not brave enough, I'm not so sure about releasing and injecting those pesos for the purchase of dollars. I'm not sure those pesos won't end up buying dollars or pressuring prices, at a time when I see people buying a lot of dollars and it's costing me to keep inflation below 2% monthly.

So the Central Bank is monetarily trapped: it sees the issue, perceives the problem, realizes what's happening, but can't find a way out. It's like being in a dead end. Because if people are buying 3 billion dollars a month to travel, save, or hoard, that's a lot, even by Argentine standards. That's over 30 billion a year. And no matter how extraordinary your exports are, having 3 billion dollars in purchases per month is like entering a soccer match down 3-0: you won't come back from that.

"Reducing inflation comes at the cost of keeping the economy cold"

Q: Measures like increasing energy subsidies or slightly loosening the dollar, aren't they enough to achieve a reactivation?**
A: They are not substitutes. Just like the mortgage loans that use ANSES fixed terms to fund banks and lend more fluidly in the long term, nor the expansion of the universe of companies that can take credit in dollars, which was established two or three weeks ago, nor the specific, micro liquidity injections, when suddenly one discovers that on such a day the Central Bank released a little pesos.

Nothing very specific and sporadic substitutes or has the power of a central bank that buys dollars, manages to remonetize the economy, and ensures that the pesos being released do not go to the dollar or pressure inflation.

It's an art; it's not that easy, and it hasn't happened that many times in Argentina. But there have been central banks with political backing and the support of an economic program that achieved it: they reactivated strongly, with more winners than losers, and with a very low inflation rate. That's what is not being achieved.

It would seem that, in these years, reducing inflation comes at the cost of keeping the economy cold. As if there were a conflict: if I want to keep inflation below 2% monthly, it seems that in the long run I will achieve it, but with few pesos and little activity. And that's not the business. The business of a successful economic program would be to reduce inflation to 1% monthly durably, but with vigorous activity. If all I do is reduce inflation with cold consumption, mediocre investment, and relying solely on exports, I will end up somewhat crooked.

Q: So this is not just a matter of time, as the Minister of Economy alludes to, who said: "I can't do magic; we can't be Switzerland in two days," but rather a lack of tools?**
A: That's a very good question. What is the Government's proposal today? "Someday, if I persist and persevere in this scheme of fiscal balance, monetary caution, deregulation, and economic opening, this will mature and take off the economy."

The direction is clear, and the program bets that sooner or later that will happen. It could be, no one says it can't be. The problem is that one never knows how long "someday" is, because if someday is within a year, that's one thing, and if it's within five years, that's another. For a company that opens every day, telling them to "hold on for six months," "hold on for a year," or "hold on for five years" is very different.

There are things that this program has taken root, which can serve going forward. But it is lacking in the area of reactivation, which is somewhat lagging. And the Government, on one hand, tells you that you have to wait, that you have to be patient; and at the same time, someone appears who says, "I will die with my boots on." It's a somewhat extreme or contradictory message. And many times reality leads you to the point where that "dying with your boots on" ends up having short legs, as long as you don't have conclusive results.

At this point in the game, Carlos Menem in 1994 was a president that almost everyone perceived as heading towards a secure reelection. Néstor Kirchner, in 2006 and 2007, had an economy with conclusive results and it seemed evident that Cristina Fernández would be president in 2007. This is not the case, because the economy is not as vigorous or stable as to say that this Government is heading towards reelection. But it is also not as bad as Cristina Fernández in 2014 and 2015, who ended up losing to Macri; Mauricio Macri in 2018 and 2019, who ended up losing to Alberto Fernández; or Peronism in 2023, who ended up losing to Milei.

"One should not be guided so much by public and official expressions, reality ends up imposing itself."

Q: Caputo recently traveled to the United States and stated that both the IMF and JP Morgan and the World Bank praised the program, which does not discuss local agenda issues, such as credit delinquency, and that we must move forward. Is that optimism he conveys the same as what is seen in the market or does he have more reservations regarding the economic program?

A: Neither an economic team, an IMF official, nor a bank that is lending money to Argentina can publicly express such obvious doubts, especially outside the country; except in internal meetings. But you hear people in Argentina, who are no longer in the organization or are not involved in the Argentine case, and they are a bit more realistic. You can't ask an Economy Minister to express doubts publicly, but it is clear that, beyond what each one says or expresses, and as the Government itself says, reality is reality and it will come knocking at your door.

One should not be guided so much by public and official expressions or by what is talked about outside the country: reality always ends up imposing itself. And the reality is gray.

Q: In this context that you mark, does it make any sense to talk about productive transformation? Are we reallocating resources to have a more efficient productive matrix or are we splitting it between what grows and what directly decreases?

A: First, if one had to extrapolate today's picture and say, "Argentina will remain like this, with 15% doing well and 80% not doing well," it seems difficult.

There have always been winners and losers, even in the best moments, during the strongest recoveries. But with this asymmetry of 15% doing well and 85% doing average or poorly, it's hard to endure such a situation; it seems difficult for that to be the definitive picture of Argentina. That's why the government says that at some point it will spill over to everyone.

Others tell you that the key is to understand whether this economic policy scheme is sustainable over time. Because it works for both: if you tell the winner, "this is going to strengthen, and these are the rules of the game for the next 15 years," the winner will invest more and will approach their activity differently. And if you tell the loser, "this is what there is for the next 15 years," they will also take things differently, because today there are losers who are still trying to see if this continues or not, if it has sustainability or not. On the other hand, if you say, "this has a long way to go and you will have to adapt," they might tackle things differently.

We are at a moment when the economic program is being tested. When you ask me that, deep down you are asking if this is what will be there in the next four or five years. It is still not very clear. Now difficult months are coming, as always, because the electoral process is approaching.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.