Monday, October 2, 2023

Rubinstein defends weekly monitoring of inflation and calls for a surplus in 2024

The Minister of Economic Policy, Gabriel Rubinstein, defended this Saturday the publication of a weekly inflation monitoring of his region, pointing out that in order to reduce prices it is necessary to aim for a budget surplus and a narrowing of the exchange rate gap price for next year.

“The truth is that having your own (weekly) index is not a dream because sometimes it is very bad. It’s simply a possibility follow the development of prices in the economy more closely and a completely independent estimate from Indec, as any consulting firm can provide,” said Rubinstein in an interview with Radio Miter this morning.

He clarified that “it is complementary” and the intention is to “share it with everyone” so that “unfounded expectations are not created.”

According to the latest estimate posted this Friday on her X account (exTwitter), the In the week of September 4th to 10th, prices rose 2.1%.

“In this case, After a week with many increases, it seems to me good to show that the indices are falling“, noted the official, explaining that its dissemination is also based on the fact that there is a “completely different dynamic” of inflation after the last devaluation in August and the subsequent fixing of the official exchange rate.

This dynamic “will be captured in the weekly estimates in exchange for the monthly estimates, for which we will have to wait longer,” he added.

For him In September, the official estimated that inflation would be “high.”

“We cannot rule out that it is around 9, 10 or 11%. We believe that it will be very high due to the general and specific impact of the devaluation of August 14, which implies an inflation floor, a high statistical burden for September that would no longer exist after that,” he explained.

In this sense, e.g October Rubinstein expects inflation to be “significantly lower” than this month.

Looking ahead to the next elections, Rubinstein says: Massa will control inflation “in a shorter period of time” than proposed by La Libertad Avanza (LLA) candidate Javier Milei.

The minister explained that the times for reducing inflation “are linked to two fundamental macroeconomic elements”: the budget balance and foreign exchange reserves.

“When we have a budget surplus or no deficit, we don’t throw more pesos on the street and create a need for devaluation.” “That is a necessary prerequisite for stability,” he emphasized.

In the case of Argentina, since there is no access to the markets, “the budget deficit costs a lot” since “they cannot be financed without direct or indirect monetary issues”.

Budget project 2024

In this context, he emphasized that the project budget submitted by the Executive for 2024 “seeks a Budget surplus of one point gross domestic product (PBI).”

In this sense he highlighted the Decision to postpone debate on the project until after the elections because “it makes little sense to rush into approval now and then reopen it later because the new parliamentary formation does not agree.”

“The second condition has to do with the foreign exchange market, because the 100 percent gap is very damaging and affects inflation. We need to solve this problem and have a significant amount of money to do so. “Of course not the $60,000 million that Milei is talking about dollarization, but $5,000 million or $10,000 million in terms of use,” he assessed, claiming in this sense that the Argentine economy “offers favorable conditions.” to accumulate dollars next year.”

Measures announced by Massa

Regarding the impact on the deficit of the recent measures announced by Massa, such as the increase in the minimum non-taxable amount of income tax or the refund of VAT, he explained that “they are trying to compensate for them as much as possible”.

“There is a lot of work from other expenditure items that may be delayed or not completed. 60% of the budget has been executed and that leaves room for some things that don’t need to be done right away. There could be a little less in the final accounting of public investments or transfers to the provinces,” Rubinstein said.

Regarding the value of the exchange rate after the general election, he did not rule out that there was “some movement in marginal or parallel dollars”, but stressed that the official exchange rate “will remain fixed until November 15” and then “initiate” become a moderate ‘crawling peg’ waiting to see what the new government does.”

Nation World News Desk
Nation World News Desk
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