In addition, he pointed out: “We have used 60% of the State financing provided for the entire year. Never in the history of Argentina has there been so much issuance for the State, it is more than $600,000 million.”
“The speed of spending is at 150 kilometers per hour, the Patria (Institute) asks for 200 kilometers. And the curve is coming,” he graphed.
Broda commented: “On top of everything, the level of activity stagnated in a context where the Government does everything possible to raise inflation. One of the problems is the indexation of the economy. The probability that this Government will make a stability program is zero. For that, you have to lower spending, emit little, have sufficient political credibility. None of those things have them. “
In radio statements, the economist considered that “barely” the country “is going to be able to maintain the level of activity and consumption of the first quarter,” but said that “it is likely that by the end of the year the level of activity will fall “.
Regarding inflation, he commented: “It is absolutely domestic. It is fiscal lack of control with monetary financing that has slowed down a bit. People run away from money.”
“In the short term it is due to excess money supply, international prices and the supply shock affect, but it is in a second order. Of the 58% annual inflation, only 10% will be due to international prices,” he explained.
In his opinion: “The economy is very complicated, there is a dynamic of growing inflation. The annualized inflation rate of the last three months is more than 90%. The basic basket rose at a speed of 135%, that is, at an average of 7% monthly. We have an acceleration in public spending of an unprecedented magnitude. In April, primary spending without Covid, rose 93% nominal and 28% real year-on-year”.
According to Broda: “Argentina is the antithesis of what needs to be done in terms of public spending and we are further and further away from meeting the goals of the International Monetary Fund. I think the Fund is going to make the disbursements, but we have financed it.” used 60% in four and a half months of what it was for the year and the level of activity was stagnant”.
Source: Ambito
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