Saturday , January 16 2021

For Dujovne, the economy will influence the voting and expect inflation to reduce "substantial"

The election year has already started the government with difficult news about the price rise. In the first month of the year, inflation is estimated to be close to 2.5%, so it would barely be slowed down compared to December. Private projections do not expect him to show a fall until mid year, but Finance Minister Nicolás Dujovne said "now" there are economic conditions so these indexes "decrease significantly" this year.

Casa Rosada bets that the worst of the recession has already happened when Argentina has to attend this year's elections for the presidential elections. Inflation is one of the most affected effects on the pocket. Dujovne acknowledged that "there is an economic element in the ballot, but I believe that society will only focus on short-term variables, but will acknowledge the effort made during this 4 year period. "

The inflation horizon that was taken by the Executive Branch would suggest a 47.6% reduction in prices last year to a level of up to 23%, as set out in this year's Budget. Most economists and consultants believe that it's an ambitious goal.

"The rate of inflation it's still high but it's going down. Just as when the shock began in April last year, it was slow to transfer to the level of the activity, as it has more, the most restrictive financial policy also gets them, "said Dujovne in an interview with & # 39 ; the newspaper La Nación.

In that sense, the head of the Treasury admitted "that the Government's initial expectation was too optimistic about what was the chance of significantly reducing inflation".

And after the reforms made by the Government in financial and financial policy, "what has been achieved is to get an inflation rate where we already have a competitive exchange rate, customize the price of public services, and get rid of the funding of & # 39 ; r Central Bank of the Treasury. we have a similar inflation rate to Kirchnerism, but resolved all the problems, and without exclusions to import and export ".

Therefore, with the new conditions, inflation "now" could lower, according to Dujovne. "The way we have traveled allows us to realistically think that inflation will be able to fall year on year, on a continuous basis, unless we have external external shocks, but this does not happen, Now we have the basic conditions so that inflation can show a gradual decline, "he said.

One of the key factors that kept inflation at fixed levels in January compared to the previous month was the increase in public transport applied since the middle of the month, which will be repeat again in February and March. There was also an increase in 17% water bills. The reduction in fuel prices at service stations did not compensate for this increase.

There is no private consultancy providing less than 4 percentage points far from the Ministry of Finance's projection. "The 23% official is clearly a difficult estimate to achieve. The lowest number you can apply is 27%, is more likely to be something closer to 29%. It depends on the whole series of the year, but I believe that even the Monetary Fund will adapt its projection, of 20.2%, "said Juan Luis Bour, a economist in FELELY.

In C & T Asesores Economicos, it is believed that inflation will only fall between 2 and 3 percent only in the first quarter. "" That already tells you about the year that we will get a price increase of around 27%. assuming a dollar that will rise moderately and that it will be close to the exchange band, "said María Castiglioni Cotter.

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