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Pinyanyli: "We are badly ending, but the worst is yet to come"

Daniel Cortes

By Daniela Cortes Buenos Aires correspondent

Economist Aldo Pignanyeli talked with El Territio about the economic prospects for the year to begin.
"Recently, a senior International Monetary Fund (IMF) official asked me if the Argentines are aware of what is coming. I think we are ending a very complicated year, but the worst is yet to come," Pignaney said openly to start the interview.
In order to explain his point of view, the economist said that "in the course of 2019 two fronts will be combined that do not bring good news for Argentina. On the one hand, on the international side, the strong supply between China and the United States has intensified and therefore will cost more to buy and sell them in those markets because the fight of giants is moving towards prices. And internally we will live another year with high inflation, which will make the calculation as optimistic as possible, it will be about 30%. "
For some economists – given that this year will close with 48 percent inflation – the projection of inflation from 30 percent to 2019 means improvement. However, Pignanyli does not see it that way.
"It's like we came in a car of 430 kilometers per hour and we drove off the 300-km speed." We still have a serious risk of hitting a big stick, as the maximum is allowed 50 kilometers, with inflation, the same happens. 30% per year means very little for the pocket of the majority, "he said.
The economist, who served as chairman of the Central Bank of Argentina during the presidency of Eduardo Douhalde and now part of the ranks led by Sergio Massa, said "it also has a big focus on what might happen to the price because if the exchange rate is adjusted according to the purpose of the International Monetary Fund, for the next year we will have at least a devaluation of 30% with a green ticket that can reach 50 pesos by the end of 2019. "
But he immediately warned that "this scenario is in the most favorable outlook, because if we are starting to spin the scale and the international factors, we can experience another unpleasant surprise."

Inflation control

Reflecting on inflation as one of the problems most affecting the lives of the Argentine this year, Pignanyelli said that "we must not forget that last year during this time the Makri government told us that we will have an inflation of 8% and we are finished 2018 with more than 48% inflation ".
"In this context, if we look at the most vulnerable sectors of the Argentine population, where the food basket has a major impact, we see that food inflation exceeds 50% comfortably, therefore we insist on the inflationary process to hit harder, those who have less," exclaimed he.
He then noted that "this record level of inflation puts our country on a sad podium of nations with the highest inflation in the world. Because it surpasses Venezuela and we are fighting in second place with two countries that are at war like Sudan and Syria."
Asked whether Maurizio Macri's government could control inflation during 2019, Pignanelli reiterated that "this is difficult to achieve, as countries that had such inflation, such as Chile in the 1980s or Israel and Mexico, managed to overcome by political agreements, social and economic Because when the inertia of inflation comes, permanently each sector has waged a battle, called a distribution bidding, and then it becomes difficult to get out of that vicious circle because it is a sale, which can be where what all PBT ".
But, according to Pinyanyelli, the national government "has neither the will nor the capacity to reach that level of comprehensive and comprehensive agreements calling on all parties to end inflation." I do not see intelligence or willingness to work in that sense by the current rule of government ".
The economist also noted that "this year ends with an inflation rate of over 48%, and wages are adjusted between 25% and 28%." This means a loss of 20% in relation to inflation Because the employee increased his income by 28%, but cost of living has increased by 48% You do not have to be very enlightened to understand why people do not have enough money Because inflation devotes everything. "

"The government is still lying to us"

He also consulted other views of economists who believe that 2019 will be a year of economic recovery for the country, Pignanneli sharply responded.
"They are the same as those who say inflation this year will be 8 percent and the dollar will not be worth more than $ 20. They are the same purses that lead us to a way without a way out. I have no respect for these gentlemen, because they constantly lie and buy from the government. A government that, instead of telling us the truth, is lying. "
He then stressed that "if people want to believe in colored mirrors, let them do it." Then comes the crash against the wall. When I say lectures or on the street, people tell me "you and Lavanda were right in the end." For three years we preached in the desert, saying that we went wrong, unfortunately we were right, I understand that it is motivated to believe that things will improve. I have my family here and I want the country to move forward. But, to re-activate the economy, they are not achieved only good intentions. "
From Pijaignelli's perspective, "the result of the 2019 elections no longer depends so much on the government, which has very little space for action but depends on the opposition. It remains to be seen whether the opposition manages to present a new option for society, differing from a crack that divides so much. If it succeeds, it has many chances to come to the government. "
"At this moment I give them a very important role for governors," he concluded. "For the role they can manage to fulfill as overseers of this complicated instance," he concluded.

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