After evaluating the speech of the President of the Republic, Louis Abinaderfrom last Monday, the economist Haivanjoe Ng Cortinas considers that the increase in prices began in July 2020, when the rate of inflation of twelve months, accumulated a level of 4.35% and not because of the warlike confrontation between Russia and Ukraine.
“From the date indicated until now, the rise in the cost of living has not stopped, which is why the government with the announced measures has reacted late, harming the Dominican population,” says the economist through A text.
He adds that the delayed reaction will not help control the inflation because it only addresses part of the consequences that affect low-income people and the middle class and does not attack the part of the causes of an internal nature that is generating the inflation In the economy.
Ng Cortiñas gave as an example the subsidy to the transport sector, the 10.0% subsidy on imports of some products, the monitoring of prices through the programPrices Justos” and the streamlining of procedures and permits to avoid delays in the supply of foods.
“These measures will have little or no impact in favor of lowering prices or controlling Dominican inflation”Economist
It understands that so that the population does not continue to suffer from the evil of inflation current, the government has to adopt measures that attack with the same intensity as the rise in prices affects the population.
“The way to be effective in combating inflation it is by attacking the internal causes that originate it, both in the fiscal and monetary spheres. On the fiscal side, the government must strictly spend what it earns, as the only way that, in the current situation, the fiscal deficit does not further feed the increase in prices that affects the economy”, explains the economist.
He points out that, at present, the priority is not the “economic growth vain“, which the fiscal sphere has promoted, generating overheating; the urgency is to lower the inflation that hits the entire Dominican population.
The economist adds that in the monetary sphere, the government must allow the Central Bank to freely assume its role of guaranteeing a lower inflation and stability. For this, he understands, the monetary politics must return to normal, using all its tools, so that the money supply and the interest rate of monetary politics adjust to a level of growth of the economy that is more in line with world reality, with bank interest rates that contribute to that objective.
“The vanity of a high economic growth that is promoted from a fiscal dominance does not make sense in the hectic moment that shows the increase in international and local prices”Economist
It specifies that the inflation The world economy is on the upward course, it does not have the transitory character that some believed, and since the Dominican economy does not have the capacity to influence this behavior, the priority must be to use the internal tools of fiscal and monetary policy to combat the high inflation that is suffered
