This Thursday in the Encuentro interview with Julio Villagrán, the economist Rafael Lemus, spoke about the approval made by the ruling party in the Legislative Assembly of a new issuance of $1,000 million in securities to meet different and emerging general obligations of the State, where The economist explained that this is a new debt acquired for the country that is not contemplated in the National Budget.
“We are starting the year, you cannot say that you have an unforeseen event of $1000 million dollars, the precedent is that the President of the Republic has increased the country’s debt by more than $10 billion,” Lemus said.
In this sense, he explained that no government had ever put the country into debt of this magnitude, and that at the pace at which the current government was going, the debt has reached more or less $300 million a month. “It is something so disproportionate to the reality of the country”he added.
“In finance there is a principle, the greater the risk, the greater the return that will be required, the situation of the country is unsustainable debt and it is being lent at higher rates”. Furthermore, the economist pointed out that in this situation the big winners are the banks since they are calm generating more profits.
Lemus explained that all the issues and changes that this government has made have been at higher rates, for example, he explained that when President Bukele assumed power of the Executive, the interest rates were 9%, but now they are all around 10 or 12%.
“In finance there is a principle, the greater the risk, the greater the return that will be required, the situation of the country is unsustainable debt and it is being lent at higher rates”he indicated.
Lemus pointed out that this government believes it has the magic key, and that is to take on much more debt each year, which will only lead the country to a debt crisis, similar to that of Argentina and even Spain, who had a fiscal disorder.
“This Government is still on a debt binge, it is not making adjustments. $1000 million were approved last night without waiver of procedures, this disorder cannot be paid for”reaffirmed the economist.
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