The Secretary of International Economic Relations of the Foreign Ministry, Cecilia Todesca Bocco, said on Tuesday that the Government expects inflation to drop from “this month and the next”, while ruling out “cooling” the economy to reduce prices. .
“It is clear that at the beginning of the year we have had an acceleration of inflation”said the official, who reiterated that the problem represents a concern for the Government.
In this context, he pointed out thatIt is expected that the index “this month and the next will slowly go down”, and blamed the “international shock” of prices generated by the war between Russia and Ukraine that exacerbates a problem that the country “had before”.
“The acceleration is basically caused by the effect of the war on food and energy prices,” explained Todesca Bocco in statements to the online radio Futuröck, noting that “there are international indicators such as that of the FAO (Organization of the United Nations United Nations for Food and Agriculture) that prove it”.
According to the last index of April of said organism, food prices showed an increase of 29.8% in the interannual comparison.
“We would like (inflation) to go down faster, but we also have to see what happens on the international scene, since prices do not all settle at the same time,” explained the official, and indicated that, if the conflict had not been triggered war, “there would not have been a low inflation but there would have been a decrease compared to that of 2021”, when it marked 50.9%.
In this regard, the economist said that “there is little we can do about an international shock.”
Besides, Todesca Bocco ruled out the possibility of “cooling” the economy, in order to reduce inflation and the demand for dollars.
“I do not think that growth should be lowered in this instance because Argentina does not have to recover only what was lost in the pandemic, that in terms of activity and employment we have already recovered everything, since we came from a previous quite pronounced crisis that note still in the income”, he affirmed.
In this regard, he noted that currently “Economic policy, and especially fiscal policy, is being expansive and not contractionary”.
However, according to the former deputy chief of staff, “the sheet is a bit short” and “joint problems cannot be resolved overnight”, since the country “walks through a narrow gorge due to the debt that the previous government took and conditions in the world.
“Monetary and fiscal policy has to be reasonable and you have to know what can be financed and what cannot”, stressed.
On the other hand, regarding the first review of the program with the International Monetary Fund (IMF), Todesca Bocco was optimistic about it.
“I understand that the first review is fine and the second is working,” said the official, while describing the dialogue between the Government and the multilateral organization as “rational.”
In that sense, he emphasized that possibly “adjustments have to be made in the agreement” in the face of changes in the situation, although without modifying its essence.
“One thing is the goals set by the agreement and another is the objectives that must not be lost sight of, which are, for example, that the economy and employment grow, poverty decreases, and that Argentina strengthen its external sector” , concluded Todesca Bocco.
