Without an economic plan, there is no reason why inflation should not accelerate.

。 4.7%

In 2020, BCRA provided 7.3% of GDP to the government. At that time, many economists warned that it was dangerous to issue a large currency in the short term and prices would sooner or later rise. However, amid the collapse of economic activity and the growing demand for preventive funds, the impact decreased in the short term and the inflation rate was only 36.1%.

In 2021, things were different. The government continued to raise funds from the Treasury through the issuance, which in this case amounted to 4.6% of GDP, and the recovery of economic activity and a decrease in demand for funds played an important role. Inflation rate closed more than 50%. The problem is not only in numbers, but also due to the economic populism that the government adopted last year to raise scores in the legislative elections, the relative price adjustment has been postponed until this year. That is, by 2022, it will not only adjust inflation for gasoline, tariffs, advanced, telecommunications, etc. this year, but also do what the government did not want last year.

That is why the monthly inflation rate is 4.7%, and it appears to be lower than in March due to the increase in the number of schools and regulated price adjustments (as mentioned in the previous paragraph), so the forecast for this year is that inflation is close to 60% instead of 50%.

To implement a serious anti-inflationary plan, it is necessary to reduce the dependence of the Finance Ministry on BCRA. Without this freedom, any plan would be less reliable. The previous government had to learn that Friedrich Stiringer's BCRA strengthened monetary policy by raising interest rates. On the other hand, the fiscal deficit not only did not decrease, but it also added a mistake, which was evident among economists at the time.

Now, how can this government close the fiscal loophole of around 3.5% of GDP? Of course, the measures to be taken were not welcomed. More than one member of the government, especially those associated with the Vice-President, knew this, and the vote on the parliamentary agreement began to reflect laughter.

Despite what Martín Guzmán said in the IMF agreement, Argentina will not return to the path of sustained economic growth. The reason for this is simple. Nowadays, the rules of the game dictate that there are no rules. One day the withholding tax was 31%, and the next day the withholding tax was increased by 2 percentage points due to the suspension of export registration. One day, the government imposed a price control on the products it sells and announced that all the products sold by it had been lost. As a result, there are no countries that can create jobs, even if they have achieved the fund's goals. In this regard, reaching an agreement with the IMF was a necessary but not sufficient condition for Argentina to solve the problem.

Without structural reforms, the rules of the game will not change, and Argentina will continue on the way to a permanent economic crisis. The war decision outlined by the president smells more than a serious plan for price control and tightening new rules. Then, today's bread, tomorrow is hungry.