President-elect names a moderate to head statistics agency
The announcement suggests that Argentina's public statistics agency will remain independent. Between 2007 and 2015, when Cristina Fernández de Kirchner was president, official statistics were tampered with to underestimate the inflation and poverty rates. During this period, Mr Lavagna led a consulting firm that published independent inflation estimates, which were criticised by Ms Fernández's government. In a statement accepting the appointment, Mr Lavagna praised the work of the outgoing INDEC head, Jorge Todesca, who rebuilt public statistics after the wreckage left by the Fernández administration.
More broadly, amid huge speculation over the cabinet make-up, and in the absence of any cabinet announcements, Mr Lavagna's appointment to a top state agency is an important signal that moderate politicians will have a place in government. More speculatively, it could also be a sign that Mr Lavagna's father, Roberto Lavagna, will actively support the incoming Fernández administration in some formal role. Reports indicate that Mr Lavagna Sr, a former economy minister and presidential candidate (he came in third in 2019) has refused the post of Treasury minister. However, he might consider heading an economic and social council of representatives from the government, businessmen, civil society and labour unions. Mr Fernández would like this council to agree on policies aimed at containing price increases and reducing social tension.
Meanwhile, speculation over cabinet appointments persists, with names set to be divulged on December 6th, four days before the new government takes office. In the meantime, difficult and protracted negotiations appear to be taking place between a moderate faction of Peronism and a left-wing populist faction backed by Ms Fernández, the incoming vice-president. Creditors will be hoping to see the moderate faction claim victory, and dominate nominations, such as to the Treasury ministry. The delay in making appointments is counterproductive, bearing in mind the limited time available for Mr Fernández to produce a plan to avoid disorderly default.
Impact on the forecast
Our forecasts currently assume a relatively pragmatic, centrist economic policy, and Mr Lavagna Jr's appointment is supportive of this assumption. However, a lack of communication on other key appointments—and on policy during the political transition process—is of concern. Further delays and evidence of continued political wrangling within Mr Fernández's team would increase the risk of disorderly default.