October 5, 2023 1:12 am m.
The dollarization of the Argentine economy, a proposal by ultraliberal presidential candidate Javier Mili, will not create problems. “Financial Accounts Under Verification”said William Maloney, World Bank Chief Economist for Latin America and the Caribbean. According to the WB, Argentina’s economy will contract by 2.5% this year.
A poverty rate of more than 40% and 12-month inflation of more than 120% in August, The outlook for the third regional economy is grim.
To solve it, Millay, a right-wing economist, proposes abandoning the peso Embrace the dollar if it wins the October 22 presidential election.
(Also Read: Elon Musk Enters Argentina’s Presidential Campaign)
(See: Why Argentina’s Dollarization May Not Be Viable, According to Experts)
WB seems skeptical. “Disciplined financial accounts and low rates of money growth”, i.e. controlling the amount of money in circulation, are “absolutely critical to managing inflation.”Maloney said firmly “No Alternative”. “That applies to dollarization.”he added.
“Dollarization is good for managing inflationary expectations because if you don’t manage to get your financial accounts under control, you will only face other distortions and other problems”A senior WB official assured.