While consultants and economists take it for granted that March inflation would be far from the horizon of 3% that the minister Sergio Massa had outlined, Domingo Horse analyzed this Thursday, April 13 at night, “the general orientation of economic policy” and predicted a annual inflation above 120%in case the flow of “pent-up inflation” that the national government seeks to “contain”.
Consulted on the channel LN+ on the difficulties of the economic management of the Front of AllCavallo warned that it is possible that monthly inflation stabilizes “between 6% and 7%.”
Cavallo proposed “freeing prices”
In this sense, the former Minister of Economy asked the ruling party for “an effort” so that finally Repressed inflation “surfaces”. (originated according to Cavallo by the policies of control of prices and the pressures exerted by the Government).
From the economist’s perspective, this is an essential condition “for the economy to stabilize”.
What Cavallo said regarding fuel prices and rates
“They have arranged that from now until August fuels rise by 4% per month and inflation is 7%”detailed Cavallo in LN+.
“It means that these prices are going to be delayed at a rate of 2% per month”he explained.
“After what is going to happen? They are going to have to authorize a much larger increase. It is the same thing that happens with all the rates of the services that have been delayed. All of that is pent up inflation“, considered the former head of the Palace of Finance.
“I would say that since they have no chance of lowering the inflation rate because the general orientation of economic policy and the organization of this economy make it impossible for them to believe in the government that it is going to be able to stabilize in a genuine sense, then what at least take advantage of this relatively high inflation to bring out all that repressed inflation and that the relative prices remain more balanced”, reasoned Cavallo.
The measure, according to the former head of the Palacio de Hacienda, would favor “the possible subsequent stabilization of the economy.” First of all, it would be necessary, insisted the ex-minister, to “liberate prices.”
When asked how much inflation would be if they let repressed inflation “reveal”, Cavallo calculated a value “greater than 120%” per yeartaking 6% or 7% per month as a reference.
CA/ED
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