Former Minister of Finance and Minister of Lyd analyzes the economic situation national
Büchi: Rise of inflation expectations is the most important challenge "to the authorities
addition, the economist pointed out that despite the good figures of the activity after earthquake, Chile has not solved the problem of re-grow steadily as it did before the Asian crisis.
Sebastian Valdez
not speak often but when it does, everyone listens. The former finance minister and chief of the Institute for Liberty and Development (R & D), Hernan Buchi, spoke yesterday at the seminar "Investment 2011: Fifteen years after" Compass Group, the national economic landscape, warning that higher inflation expectations long term is the most urgent concern of the government and monetary authority.
He says actual inflation does not represent major problems in the short term, as it sits at 2.7%, "almost in the middle of the Central Bank's target range." But inflation projections to 24 months, reported in the latest survey of financial operators, rose to 3.8%, which "is clearly a detaching from expectations. I think today the Central Bank will have to address this issue" .
The economist said the central bank puts the diagnosis in a major dilemma, because if the interest rate rises very strong "probably going to affect its another attempt, which is to prevent misalignment of the exchange rate with the strange conditions of the world today.
In this sense, Buchi said the short-term inflation is not yet "got out of hand" to college issuer. "Probably, it is expected to drop food in recent days, that this does not fall (...) but there is a problem of expectations and is the most important challenge today," he said.
Sustained growth
Alongside this, the former secretary of state said share "fully" the government's goal to grow at rates between 6% and 8% in the next years.
However, the expansion called post-quake as "a mere recovery" because the country still can not recover the trend of sustained growth that was before the Asian crisis.
"Make no mistake, the recent growth figures are interesting, but when you're facing a situation like this is to lay the groundwork for later. I told the minister (of finance) that we should not judge by the results that have these years, should be judged by the ability you have for when you leave the government have left the country to grow at 6% for many years, this is the real challenge. "
He continued: "In that sense, I think the issue is not resolved. There is a good environment in which we will see good numbers in general in the short run but not get excited that we finally resolved the problems that" .
Employment: comparing apples and oranges? Hernán Büchi
called "bad luck" that the INE has changed the employment survey just the year of the earthquake and when NATO assumed in La Moneda, and that while the creation of over 400 000 jobs during 2010, "quantum leap" that topped the trend of previous years, "there is the discussion (of) if we are comparing apples and oranges. "
also noted that the country has not solved" all "the low participation of low-income youth in the working world, where numbers are" catastrophic "for the unemployed and the low incidence of women despite the change in the survey.
Exchange Rate and Fiscal Policy
LyD Councilor referred to the Central Bank foreign exchange intervention, noting that "part of that program at the end was less effect because there are still doubts whether it will be able to comply ".
distrusted explained that the market purchase program currency given its "shocking" size.
"The differential effect of rates has probably been getting worse and will remain so, especially in this situation of rising inflationary expectations in Chile," he said.
The economist said the Central Bank "should not compromise on the use of instruments is to prevent the exchange rate to appreciate too" , if any short-term reasons to push this.
also slipped critical to increasing public spending registered in December, which "profoundly called the attention" of the economist, who believes that the government was "worried they said they had grown little expense in the year. "
also pointed out that the healthiest is that the product will grow more than the spending and" effectively "sees a change of policy current government in relation to the Bachelet administration in this regard. "You should start seeing a treasury that is moderated to help the exchange rate and it is easier than the economy can recover in a sustainable and growing 7%" he said.
Source: not speak often but when it does, everyone listens. The former finance minister and chief of the Institute for Liberty and Development (R & D), Hernan Buchi, spoke yesterday at the seminar "Investment 2011: Fifteen years after" Compass Group, the national economic landscape, warning that higher inflation expectations long term is the most urgent concern of the government and monetary authority.
He says actual inflation does not represent major problems in the short term, as it sits at 2.7%, "almost in the middle of the Central Bank's target range." But inflation projections to 24 months, reported in the latest survey of financial operators, rose to 3.8%, which "is clearly a detaching from expectations. I think today the Central Bank will have to address this issue" .
The economist said the central bank puts the diagnosis in a major dilemma, because if the interest rate rises very strong "probably going to affect its another attempt, which is to prevent misalignment of the exchange rate with the strange conditions of the world today.
In this sense, Buchi said the short-term inflation is not yet "got out of hand" to college issuer. "Probably, it is expected to drop food in recent days, that this does not fall (...) but there is a problem of expectations and is the most important challenge today," he said.
Sustained growth
Alongside this, the former secretary of state said share "fully" the government's goal to grow at rates between 6% and 8% in the next years.
However, the expansion called post-quake as "a mere recovery" because the country still can not recover the trend of sustained growth that was before the Asian crisis.
"Make no mistake, the recent growth figures are interesting, but when you're facing a situation like this is to lay the groundwork for later. I told the minister (of finance) that we should not judge by the results that have these years, should be judged by the ability you have for when you leave the government have left the country to grow at 6% for many years, this is the real challenge. "
He continued: "In that sense, I think the issue is not resolved. There is a good environment in which we will see good numbers in general in the short run but not get excited that we finally resolved the problems that" .
Employment: comparing apples and oranges? Hernán Büchi
called "bad luck" that the INE has changed the employment survey just the year of the earthquake and when NATO assumed in La Moneda, and that while the creation of over 400 000 jobs during 2010, "quantum leap" that topped the trend of previous years, "there is the discussion (of) if we are comparing apples and oranges. "
also noted that the country has not solved" all "the low participation of low-income youth in the working world, where numbers are" catastrophic "for the unemployed and the low incidence of women despite the change in the survey.
Exchange Rate and Fiscal Policy
LyD Councilor referred to the Central Bank foreign exchange intervention, noting that "part of that program at the end was less effect because there are still doubts whether it will be able to comply ".
distrusted explained that the market purchase program currency given its "shocking" size.
"The differential effect of rates has probably been getting worse and will remain so, especially in this situation of rising inflationary expectations in Chile," he said.
The economist said the Central Bank "should not compromise on the use of instruments is to prevent the exchange rate to appreciate too" , if any short-term reasons to push this.
also slipped critical to increasing public spending registered in December, which "profoundly called the attention" of the economist, who believes that the government was "worried they said they had grown little expense in the year. "
also pointed out that the healthiest is that the product will grow more than the spending and" effectively "sees a change of policy current government in relation to the Bachelet administration in this regard. "You should start seeing a treasury that is moderated to help the exchange rate and it is easier than the economy can recover in a sustainable and growing 7%" he said.
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Greetings Rodrigo González Fernández
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