O inflation retailer will exceed 45% and GDP will fall "at least 2.5%" this year, according to to report announced today by the University of Belgrano.
"O Argentine economy already completed two consecutive quarters of each, which has entered the worst possible world: recession plus inflation, which is known as stagnation, "said the director of the New Economics Research Center (CENE), Vctor Beker.
The executive also pointed out that stagflation "is a rare phenomenon, normally price increases are expected to accompany the process of economic expansion and, in times of recession, prices stabilize or even fall." "However, in countries with high inflation, it may persist even in the face of a sharp contraction in economic activity," he said.
In his view, "there is an inflationary inertia that causes past inflation to determine future inflation." Therefore, in the presence of a tight monetary policy, the values are first adjusted to reduce production and employment, and only in the last period. Inflation falls significantly. "
However, Beker admitted that "the alternative explanation, which adheres to the current conduct of the Central Bank, is that inflation persists in recessive periods only because the money supply continues to grow."
In this regard, he considered that the discussion would be resolved if "the zero emission rule, until next June, allow to reduce the resistant inflation". According to the CENE report, the increase in the average salary between September last year and the same month of the current year was 25.4%, while the increase in the Consumer Price Index in the same period was 40.5%. %, with a real wage loss of 11%.
"This implies that although the announced bond will allow it to return to levels equivalent to those of May 2016, the average salary will be below the level reached in September 2017," Beker adds.