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Matías Kulfas: 'Nobody thinks that you can grow in the long term with high inflation'


"Through a path of macroeconomic reconstruction, we are solving it," says the minister. Regarding the dollar, he states that "we would like to have a single exchange rate and more lax exchange regulations."

Martin Bidegaray

07/31/2021 1:00

  • Clarí

  • Economy

Updated 07/31/2021 5:36 PM

Almost 20 months after taking office, does it fulfill the government's promise to reactivate production and create employment?

It is a quite eventful period of government. Let us remember that, three months after the start of the administration, this pandemic began, a totally unexpected phenomenon. That did not inhibit us from implementing a lot of industrial policy and productive development measures. Many of which are yielding concrete results. To give concrete examples; Today in Argentina, industrial production in a pandemic is higher than in 2019. The period January-May 2021 gives an increase of 3.1% in production compared to 2019. There is a recovery and all the jobs lost in the pandemic have already been recovered and more in the industrial sector. There are eleven consecutive months of industrial job creation.

And why are there already more than 10,000 SMEs that closed from 2020 to now?

There are some numbers that he took with a grain of salt, but one sees it in the tourism and / or gastronomic sector. What we have is an economy that today operates at two speeds. There are sectors (industry, construction, knowledge economy, energy and agribusiness) working very well, in many cases above 2019, prior to the pandemic. And there are other sectors that are badly hit. Here, and around the world, such as tourism, part of proximity retail, gastronomy, cultural activity.

Are there investments in Argentina?

INDEC data reported in the first quarter of this year that investment rose 14% compared to 2019. Since the Alberto Fernández government began, there have been more than 600 investment announcements in Argentina for more than 28 billion dollars.

There are foreign investments, with the case of terminal automotive companies, also investment in the industrial sector (cleaning and toilet articles, construction sectors), knowledge economy activities, large national companies, SMEs 

And why are so many companies leaving?

It has been a rather limited phenomenon. Some companies with global strategies that have made decisions not only in Argentina. Walmart was a very famous case. It withdrew from England, Brazil and Argentina and was bought by another very important national businessman, with a long history, with which today there is no loss of investment. What there is is an international company that made a decision to withdraw from several countries, not just Argentina. Something similar happened a few days ago with a multinational in the pharmaceutical sector that no longer produces here, but markets and that transferred the operation to another group, here and in other Latin American countries. I am not seeing divestment, they are hand change movements that are normal in different economies. If there have been strong movements in the world of air navigation,Several airlines have withdrawn, which also makes sense in a pandemic context. Surely, when this issue is overcome, many of them will operate again in Argentina.

Interview with the Minister of Productive Development Matias Kulfas.

Photo: Andres D'Elia

In the case of SMEs, do you think that tax pressure or inflation do not influence?

Argentina has major macroeconomic problems and there is no doubt.

We started the management with the macroeconomy extremely disorderly.

Let's remember no, over-indebtedness, high inflation.

Let us remember that the Macri government began by saying that inflation was a very simple problem to solve and I think that due to that somewhat banal perception, the government ended up delivering with double inflation.

Now we are on a path of macroeconomic reconstruction that will allow many of these problems to be solved.

Why isn't inflation going down?

From the end of the first stage of the pandemic, in August of last year until June of this year, there was an increase, a spectacular rebound in commodity prices. Argentina had an increase in raw materials from the Central Bank's premium of around 52 percent. This is a messy macroeconomy as Argentina has a very strong impact on domestic prices. Of course it is an issue that concerns us. This is a central issue in the economy, to be able to reduce inflation. Nobody thinks that Argentina can grow in the long term with high inflation. But I insist, it is an issue that requires a comprehensive approach, which is what we have raised. There are several causes and we are working on them. I insist,We have to absorb an international price shock with a very disorderly macro from the beginning and, above all, with the effect of the pandemic.


is your ministry doing to fight inflation?

Our view is that inflation is multi-causal, that it has a macroeconomic root that has to do with the consistency of exchange, fiscal and monetary policies. But again this must be given a complementary look, with the situation of wages and prices. We must make the salary beat inflation, which is our great objective for the coming years and this year in particular. Also with a concertation mechanism, such as protected baskets. The root of the problem is macroeconomic and that is the central point that we have to correct in the coming years. I believe that we have started to take very positive steps, such as having restructured the debt and setting a path of stabilization and reduction of the fiscal deficit with growth,

Entrepreneurs describe that they observe a macro look of you and perceive a different look with another official of their ministry ...

It sometimes has to do with this role that each one of them has. That secretary referred to is surely Paula Español, she is a person who has a complex, difficult responsibility, which is precisely to generate those baskets of protected consumption. An exaggerated responsibility is placed on her. Inflation is multi-causal, it is not resolved in the Ministry of Internal Trade. I believe that this secretariat has the function and I believe it has fulfilled it more than, of generating programs that stimulate consumption, that take care of protected baskets, and stimulate consumption (Now 12). There are no differences of views in the conceptual.

Interview with the Minister of Productive Development Matias Kulfas.

Photo: Andres D'Elia

Are you one of the "non-working officials", as interpreted by various political analysts?

I have been working with Alberto Fernández since February 2018. Since long before he was a candidate.

He has especially asked me to take care of productive development policies.

We work very closely and with the entire economic cabinet.

And I have no doubt, not only of the effort we have made, but of the results.

Industrial policy is back on track and is generating positive results.

Due to exchange rate distortions, more and more people are beginning to explore other informal channels to collect foreign jobs.

What do you think?

The larger and medium-sized companies that work abroad are in a formal circuit. That informal circuit is likely to exist, but it is rather marginal. Obviously we don't like it. We would like to have only one exchange rate. We would like to have a much more lax exchange regulations scheme. We do not believe in Macri's deregulation or such strict regulations. This is what we had to manage.

Source: clarin

All business articles on 2021-07-31

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