The president of the Central Bank of the Argentine Republic, Miguel Angel Pesce He relativized the impact of public spending on high inflation and mentioned that the country must “recover the path of growth” to contain price increases.
Miguel Pesce He said that “the problem of Argentina is much more complex than the reduction of public spending, especially because public spending has a strong implication in the social sectors of our country.” According to him president of central80% of the resources are allocated to the social area, “either to the payment of retirement and pensions, or to the payment of the Universal Child Allowance and other assistance”.
Also, Miguel Pesce He said regarding the theory that it is the fiscal deficit that causes inflation, that in the pandemic “the State had to be forced to issue significant amounts of money to be able to compensate for the drop in aggregate demand,” and in turn “the Inflation had an inverse behavior to what it had had in 2018 and 2019.
Fish He mentioned that there is “a supply and demand response problem”, and furthermore, “when supply does not respond to demand in quantities, or responds to prices and this in the context in which our country is, it recomposes business margins ”.
The phrases of the president of the Central
Among the most outstanding phrases of Pesce is: “The social fabric of our country is fragile and in this context we cannot generate recessive processes as other countries can generate to moderate inflation.”
To which he added: “Public spending has a strong implication in the social sectors of our country.”
Continuing on the path of growth, he pronounced that “In other countries of the world, to attack the inflationary problem, it is possible to resort to ways that our country cannot resort to.because we cannot open our economy, because we do not have international credit and moderate prices with imports, which we cannot do”.
And he concluded by referring to the past century: “Our country since the 50s is when inflation appears in Argentinait is no coincidence that inflation has appeared in Argentina, at the same time that we began to have economic growth difficulties”.
