The alarms lit by inflation
The economist Daniel Artana estimated this Friday that, “for now”, inflation will climb to 70% this year, but admitted that this number “can be optimistic” since it could be even higher. In his opinion, high inflation “is an issue that generates concern, because it is not clear how the government intends to deal with this problem.”
In this sense, he commented that the Executive Power “tried -in the framework of the agreement with the International Monetary Fund (IMF)- to reduce inflation in a context where it had to increase tariffs and depreciate the peso faster. And it chose a more austere fiscal and monetary policy that is not fulfilling”.
“Then, the question is what are they going to do later, because before the rise in inflation they increased spending, regardless of whether or not it can be justified in view of the people’s need. But that way the fiscal program does not go away to comply,” Artana emphasized, in statements to the Esta Mañana program, which is broadcast on Rivadavia radio.
The economist also questioned the “short-term populism” that the Government “did in much of 2021.” “They sat above the tariffs, the exchange rate and in the second semester, to try to influence the legislative election, they strongly increased the fiscal deficit,” he added.
“All this takes its toll: today we have to raise rates and devalue more strongly. And also, at the moment of wanting to make an anti-inflationary program, they begin to hit the mistakes made,” he suggested while considering that the inflation of this first quarter of 2022 “responds to the party that was sent in the second half of last year.”
As reported by INDEC, the Consumer Price Index was 6% in April and the year-on-year variation climbed to 58%, the highest in 30 years.
Artana stressed that Argentina “It has something that drives economic activity on its own, which are super favorable external conditions”but pointed out that “part of the government’s mistake is that the economy was recovering and, then, they overstrained demand. That caused a clash with the restriction of supply and generated inflation.”
Source: Ambito
David William is a talented author who has made a name for himself in the world of writing. He is a professional author who writes on a wide range of topics, from general interest to opinion news. David is currently working as a writer at 24 hours worlds where he brings his unique perspective and in-depth research to his articles, making them both informative and engaging.
