Inflation and the need for structural reforms

General director en Libertad y Progreso

Economist specialized in Economic Development, Strategic Marketing and International Markets. Professor at the University of Belgrano. Member of the Liberal Network of Latin America (RELIAL) and Member of the Institute of Ethics and Political Economy of the National Academy of Moral and Political Sciences.

ADN EMPRESARIO: “They did not reduce spending at all,” the economist said in reference to the make-up policy that the Government is carrying out around public spending. He pointed out that the future panorama is complex, since poverty continues to deepen while the Government “spends” and tries to collect more through taxes.

According to Agustín Etchebarne, that inflation in February was around 6% in January according to the INDEC was not a surprise. At Libertad y Progreso they have been warning that the Ministry of Economy is making mistakes.

The situation is very complicated and we are not surprised at all. The current government’s program is inflationary,” he said, while relativizing the possibility that the government’s goal of 60% will be met.

Yesterday, INDEC released inflation indicators for the month of January: 6% per month and 98.8% in the last 12 months.

6 percent monthly inflation is equivalent to 101 per year. And if you look at the food, inflation for the first week as already more than 3 percent ”, warned Etchebarne.

On the other hand, the interviewee said that the Government “continues to think about controlling prices and this does not work. Salaries are below inflation and, therefore, since 2011 poverty in Argentina has increased”. He predicted that if we continue on this path, “we are going to have an inflation that, as minimum, will be the same as last year and we run the risk of it being much higher”.

Regarding the current context of the Argentine economy, the specialist said that “leliqs and pases are already equivalent to 210% of the monetary base. We have repressed inflation through the remunerated debt of the Central Bank and delays in services and prices”.

Finally, he criticized the fact that Minister Sergio Massa did not carry out any serious change to fight inflation and explained that the solution must be fundamental and profound. We must change the logic that the State spends more than it receives and permanently imposes taxes. There is a huge waste.”