The main challenge will remain the pandemic: Yorio

Under Secretary for Finance and Public Debt (SHCP), Gabriel Yorio González assured that the economic concerns for this year are volatility of the Covid-19 pandemic and control over inflation levels – which is at its highest point. 20 years.

In an interview with La Rezon, the official recalls how he faced the most difficult economic crisis of the past 80 years, within the Secretariat that is in charge of the country’s public finances, in the face of a scenario in which there are no vaccines in the world. reached every corner of the

It indicates how, in the most critical moments of crisis, the agency has faced decisions and costs; However, he assured, the strategies he chose, such as not incurring more debt to face the effects of the pandemic, have been well looked into.

In the future, he affirmed, a continuing task would be to keep inflation at a low level and avoid talking about stagflation, a scenario in which most shocks come from the supply side and not the demand side, which means that There is no major impact of monetary policy. effect.

How is the country’s economic recovery going, is there any slowdown? We had already considered the effects of the waves of the pandemic, this was told to us by the Ministry of Health from the time the pandemic started in February 2020, at which time very short-term decisions were focused on controlling and consolidating it. health sector. Next, the information we found is that the extent to which we had vaccines, although we may have had waves, would dramatically reduce the number of severe cases… decided, but rather ranges. What analysts are seeing right now is an overall movement where some have already expressed a slowdown, but if we look inside, each of the most important sub-sectors, such as those that have been most lagging behind due to the pandemic , they are increasing. We are going to see a baseline impact and a more general increase in terms of what we saw before the pandemic by 2022; So we’re going to stop seeing 6.0 or 4.0 percent growth and we’re going to get into our potential growth.

So is the growth outlook for 2022 holding up? Yes, we’re maintaining that, because the volatility we’ve seen and of course we’re going to start experiencing in this potential fourth wave is going to have an impact on economic activity, but that impact is still going to affect us. advances. The range that we have proposed in the criteria, it is very likely that we will not reach the 4.1 percent that we proposed, it will be a little lower, but it will still be in the ranges proposed; However, at this time we are not going to do an official review because there are clear dates where the Treasury does this.

How has the Under Secretary of Finance experienced this crisis? It is one of the worst crises experienced in the last 80 years. What we saw was the chaos of the local markets, a lot of volatility; What we did was analyze the 2009 experience with the AH1N1 flu, but it was very difficult to pinpoint the impact of COVID-19 precisely because we had an economic imbalance. I think they were moments of many challenges, analysis, internal debate about what kind of action we can take and also analyzing what was the scope of the action… Now, practically not to take much debt. try; However, I think one of the great lessons is that to this day, it is not very clear how the pandemic will develop. We also had a lot of contact with our own counterparts, I think that helped too; I remember we were talking with the Chilean Ministry of Finance and they were reading the same thing but for their main partner which is China, when we were doing it with the United States, we talked with countries like Colombia Of, was trying to get this information. in the maximum possible real time. Another decision we made was monitoring of high frequency information that we don’t usually do when we are in a smooth cycle time.

The main challenge will remain the pandemic, both locally and globally, and the second challenge is the inflationary pressures at the global level that we will continue to see.

Under Secretary of State for Finance and Public Debt, Gabriel Yorio

Is Micron going to be a challenge for the country’s development? I think there is a lot of information that needs to be analysed. I think the main issue will be if we experience a fourth wave around the peak of Christmas. We have to monitor how it can affect mobility and if it is going to have an impact on the economy once again, if mobility is not restricted, as cases remain in controlled deaths, then the impact will be less. That wouldn’t be the case if we started seeing an increase in deaths or something that would lead health officials to shut down activities again. I am confident that these waves of pandemic will continue to pass until the world enters full immunization.

Are we in a stagflation recession? No, I think we are far from facing stagflation, and I think it hurts to talk about something that is not necessarily happening. The world is improving and we are seeing this at the level of aggregate demand which is already putting pressure on prices Goods and energy. So aggregate demand has improved which drives international growth, now we are also seeing price issues, there is a significant lag in value chains, introduction of microprocessors (chips). Also, Covid suspended some activities that should not have been suspended, such as the production of containers and now we have a gap. Here I want to make a parenthesis, the pandemic did not cause the destruction of the real economy or an international imbalance, but we have gaps in the production of some sectors and the example is in containers and this is reflected in the increase in transportation prices by about 10% Guna… so it does a lot of damage at the moment, talk of stagflation, because we don’t have a stagnation of productive activities.

And how does inflation affect it? We should be concerned with how we are going to handle this when almost all the shocks come from the supply side and not the demand side, because monetary policy doesn’t have much effect, so that’s probably what we’re going to experience. There is development that is about to end. Slightly slower, but we will continue to grow, we are going to see this pressure on prices and there central banks will have to examine very thoroughly how they proceed with their monetary policies and do not affect expansion, but I repeat , I don’t see it as stagflation; In other words, we are approaching the stage of restrictive monetary policy and there we will start to see these hikes in interest rates in the country.