Sooner or later we will defeat inflation

“In the first week of December, prices were observed growing at 1% daily and at an annual compound of 3,700%, which accelerated to 7,500% in the second week. I had indicated that if we managed to close December at 30% it would be a very good number because it implies that in the fourth week there were no more increases. And it ended at 25.5%,” said the President in statements made to Radio La Red.

In this sense, he stated that, later, in January, there was a “statistical drag of 6 percentage points”, in addition to seasonal factors.

“25% was going to be a good number and it ended up 5 points lower. If you remove the drag, inflation was less than 15%. So there was a clear decrease in the inflation rate,” Milei highlighted.

Likewise, he pointed out that there is a drop in wholesale inflation, which will be known next Monday.

“From the 54% that we had (in December), if it goes to 20% (in January) it means that it is cut by two thirds, which means that the work that is being done is furious,” the president remarked, and blamed the previous government of the price increase because -he indicated- “The effect between money being issued and what is seen in prices takes 18 months.”

Javier Milei: “I come to correct the errors”

“All this loss of the purchasing power of money is not my fault; it is the result of the monetary disaster caused by the previous government. I am here to correct it. I could have stuck with and continued with the same policies of the previous government and, at this moment, “We would be in hyperinflation with 95% poor and a 20% drop in GDP,” he remarked.

The president attributed the dismissal to the application of a “very harsh orthodox program.”

“Basically, we had to stop the monetary issue. The two channels that were triggering the issue were the fiscal deficit, which was around 5 points of GDP, and the quasi-fiscal deficit of the Central Bank, which was an additional 10 points. We began to make public spending cuts. , we allowed the liquefaction of items and that made us achieve zero deficit in January when the primary balance was expected in January and the financial balance in March,” he remarked.

Likewise, he emphasized the process of recomposing the Central Bank’s reserves.

“We bought US$7,000 million since we were in office when they left us US$11,000 million in negative. We also had a problem of remunerated liabilities that generated an endogenous emission. Despite these two factors of money expansion, we have contracted by the treasury and by the BOPREAI,” explained the head of state.

In this way, he indicated that the monetary base “It is stuck at US$8 billion.” The accumulation of reserves and the stabilization of the monetary base allow, he indicated, that the country “is 87.5% capable of dollarizing.”

“If we finish cleaning up the financial liabilities of the Central Bank and then reform the financial system, it could be dollarized,” he indicated, although he stated that this last instance “will take more time.”

Milei pointed out that, According to the IMF, said cleanup of liabilities would occur “in the middle of the year” and that, once completed, the exchange market will be “liberated.” which will give the value at which it will be dollarized since it will be done “at the market price.”

Finally, he reiterated that the price increase in recent months is a consequence of the fact that “You cannot live forever above your needs.”

“What we are doing is honest with the situation. It is the first time that the adjustment falls mainly on politics and the first time in the last 100 years that Argentina is doing what was truly successful in the world. Therefore, this time “The effort makes sense because there is light at the end of the road. We are doing what the manual says so sooner or later we are not only going to defeat inflation, but we are going to become a prosperous country again,” Milei concluded.