Carlos Melconian warned about the risks of keeping inflation high until the end of the year: “It is irreversible”

Carlos Melconian, economist and former president of Banco Nación during Mauricio Macri’s government, warned on Wednesday about the risks facing the government in case of maintaining high inflation until the end of the year.

“The path of deterioration is irreversible”Melconian said talking with radio machine gun.

There, he explained that in this case it is a “non-explosive” deterioration, although he clarified that such deterioration “is inevitable”, given the estimates that inflation for the month of July will be between 7 and 8%.

“The question is whether we are in an explosive or non-explosive deterioration scenario where deterioration is inevitable. When I speak of non-explosive deterioration they treat me like an official. Non-explosive deterioration requires, how a sign that we are on that roadthat if July is between 7 and 8, August is lower, “he noted.

And he added: “The path of deterioration is irreversible, but one thing is irreversible without spiraling or spiraling. Argentine history distinguishes between explosive and non-explosive deterioration.”

For his part, Melconian has analyzed the situation in the country and has marked the path that the government has taken with the economy in recent times.

“This is a sequence that begins with the November defeat and the need to find an agreement with the Fund. Then comes that period when you need to know how you want to face the second half of the government. In the meantime both of you for what you end up signing. as for what you have to do, you fall asleep in terms of driving macroeconomics, which was basically surviving, that is, starting to settle the subsidy issue, not falling asleep with the inflation rate and not delaying the dollar, because when you lag behind in inflationary scenarios, the dollar calls for a recovery as a spring effect. That’s where the government fell asleep, “she said.

After having agreed with the IMF, according to the economist, “there is an approval of the objectives in a scenario that is taken from what was signed and which almost complicitly says’ there has been a deviation due to the war between Russia and Ukraine but we will not touch the goals of the year “.

“But yes we played the second quarter and the third quarterthen you are engaging in something big, “he noted.

And he continues: «To the sequence is added the fatal fourth week of June with debt commitments in pesos, with the widening of the exchange rate gap and the resignation of the minister (Guzmán). This actually results in a kind of inflationary leap, in the discussion on where politics remains in the ruling party and in the question of the spiral of the situation. It is not the first time that the government and the inflation rate miss the gap, but being repetitive opens more doubts “.

Subsequently Melconian arrived at what was the trip of Minister Silvina Batakis to the United States: “The trip of yesterday arrives and at the same time how we talk about politics in the local government party”.

“Yesterday’s trip is the idea of ​​who makes the economy, because here the outgoing minister had a commitment, to see how the technocratic leaders, IMF, think, ‘here they promised me a fiscal and monetary tightening so as not to devalue’. When the minister returns, there will be a meeting with politics “, he stressed.

Finally, he reiterated that “the reasoning of politics is’ let’s see what needs to be done because there is a 2023 ahead ‘and some wise mind should say’ if we want to show up decently in something in 2023, What are we going to do now? ‘“.