The Economic Advisor of the Executive power Peter Silverio admitted that the levels of inflation that have occurred in the Dominican Republic are among the highest in the region.
“It is an extremely interesting topic that you are raising, certainly our inflation levels have been among the highest in the region, and I believe that there is always a combination of factors, obviously the import structure of the countries is different”explained the high palace official.
Silverio gave as an example that for Dominican Republic the price of many raw materials, in the case of corn, is essential, but in other nations, especially in South Americawhen the prices of many of these raw materials rise, it turns out that they benefit.
“And so we see the world differently, because they have conflicting interests with respect to us in terms of international trade, I would say that that is a reason that we can argue that makes a little bit of a difference”he added.
Read more: The DR was the fourth LA country with the highest year-on-year inflation in November
However, he admitted that there are other factors that he as an economist cannot ignore, as is the case with the issue of monetary policy.
“The issue of monetary policy, when you look at what has happened in developed countries, it has triggered inflation, it has triggered it in the United States and Europe, especially because all these effects of the pandemic, the health crisis, the policy currency of those countries played a fundamental role in issuing money and keeping the economy afloat”Silverio recalled.
He said that in the case of U.S there was an extraordinary, enormous issue of money, and US inflation, apart from local factors, cannot be separated from all that, and Dominican Republic it also actively had a monetary policy, to counteract the effects of the pandemic.
“And that monetary policy meant close to five percent of the Gross Domestic Product, it was a large issue of money that began to circulate in the economy, and when these measures were taken there was a lot of uncertainty, and it was very difficult to specify what the package was. right, and the right size to deal with the pandemic”he detailed.
He said that in a situation of uncertainty, the policy designer has three options: to design a package that is below the economy, one that provides exactly what the economy needs, and another that is above what is needed.
He noted that in uncertainty, the designer of economic or monetary policy prefers to choose the package that is just what the economy needs, or a little more.
It recognizes that this uncertainty is not only in the minds of those who design economic policy, but of those who produce and distribute these products, and when setting prices, think about the cost levels that they will face when replenishing inventories, and therefore therefore, every act that involves the future is speculation.
In another order, Peter Silverio assured that the main asset of the recovery of the economy, after the collapse caused by the health crisis, is the president Louis Abinaderfor the confidence it generated in the agents and productive sectors of the country, and foreign investors.
Silverio also said that, personally, he favored that the customs taxes applied to freight be used as a basis for the costs that existed before the pandemicbut there were people who understood that freezing the cost of vans, ultimately, was not going to have an impact on consumers, because they said that it was not going to be transferred to the consumer.
The government made the General State Budget of this year taking as a premise an oil price of 62 dollars and 70 cents, and currently a barrel exceeds 90 dollars.
