Although the increase in the price level of products and services moderated its upward speed last March by six basis points compared to the month of February, inflation (13.34% annual) maintains the upward trend that has accompanied Colombians for some time. 23 months.
If the inflation of March 2021, which was 1.51%, is compared with that of March 2023, equivalent to 13.34%, it can be concluded that there has been a growth of 883% in the aforementioned period of time, which launches an alert to the economic authorities to stop the increase in the Consumer Price Index (CPI).
In this regard, the professor of Public Finance and Budget of the Faculty of Jurisprudence of the Universidad del Rosario Henry Amorocho affirmed that inflation is not only attacked with the increase in the intervention rate, as the Board of Directors of the Banco de la República, but with a consistent macroeconomic policy in which State institutions collaborate harmoniously.
“We have been increasing the intervention rate for twelve continuous months without reducing inflation and the exact opposite result has occurred. The State must assume the challenge of lowering inflation with adequate control of the exchange rate, the usury rate, the intervention rate, the prices of public services -especially those related to electricity- and the process of the reforms structures in line with the fiscal reality of the country”, he explained.
The professor pointed out that in order to control inflation it is necessary to overcome blind confidence in the use of the interest rate as the only measure to combat it because the abuse of this measure is close to causing a sharp drop in aggregate demand that could affect the sectors housing, business entrepreneurship, food, beverages, restaurants, tourism, leases, imports, among others.
“There are winds of reduction in per capita consumption. If we continue with this uncontrolled inflationary path without measures that truly adopt an active role of supervised price freedom by the different inspection, surveillance and control bodies, we will not achieve the goal of having the highest growth peak of the inflation at the end of May 2023″, he noted.
According to Amorocho, the constitutional, legal and jurisprudential mandate that obliges us to look at the economy from the perspective of economic stabilization must be fulfilled, without neglecting the levels of employment, growth and macroeconomic coherence, which tend to harmonize the fiscal and monetary variables necessary to advance in overcoming the fiscal and balance of payments deficits.
Lack of prominence of control entities and unions
Amorocho indicated that the meager activity of the state control bodies to deal with inflation is palpable.
“The Superintendencies of Finance, Industry and Commerce, and Public Services, as well as the Comptroller General of the Republic, are going unnoticed at this juncture, in a context in which prices in many sectors seem not to be assigned by the market forces nor by an objective accounting of costs, but rather by what each sector comes up with”, he emphasized.
He specified that the Government invited the unions to make businessmen aware so that they help moderate the inflation of industrial products and services, however, this will not be of much use, unless the underlying reasons are attacked, since it is necessary that companies are formalized so that they have normal and cost accounting and are not assigning to the “ojimeter” and to the convenience of each sector the increase in prices to the detriment of the well-being of the population.
Effective management and execution of public investment to lower inflation
The call to the Government and the Issuer is to reduce inflation with comprehensive public management and deactivate the slowdown of the economy with an effective management and execution of public investment, which will allow us to get out of the forecasts of growth between 0.8% and 1.1% of GDP. (Gross Domestic Product) by 2023.
“Colombia can achieve growth between 2.0% and 2.5% of GDP and inflation between 8.5% and 9% by December 2023, if we can take into account that the administration of public finances, the economy, politics, the history and sociology are closely related to compliance with the principles of reserve of law, the efficiency and effectiveness of public administration and the general well-being of the community, under the aegis of the Social State of Law”, affirmed the academic.
In order to achieve these objectives, agreements are required between the Government, the Congress of the Republic and unions on the reforms of the health, pension and labor law. In addition, the information provided by the executive branch so far is neither complete nor definitive.
“This way of presenting the projects and promoting negotiations has ended up fostering uncertainty, financial nervousness and speculation in the market,” added Amorocho. with Infobae