Interview: Economist says Argentina urgently needs to battle inflation, restore incomes

BUENOS AIRES, Dec. 20 (Xinhua) -- The Argentine government will start 2023 with the double challenges of controlling inflation and restoring people's incomes affected by over four years of economic recession, an Argentine economist has said.

Having struggled through a year when accelerated price hikes and foreign currency shortages prevailed, the government needs to focus on an economic recovery that reaches the majority of Argentines in the new year, Ricardo Aronskind, a professor at the University of Buenos Aires, told Xinhua.

"The economy grew especially in the first part of the year. In this last stretch of the year, it is slowing down. The general picture is that although there is economic growth and recovery, it has not reached the entire population," Aronskind said.

"There are some social indexes that are improving very slightly, but there is no substantial change or poverty reversal for a part of the population," he noted.

The economist said the first task is "to lower inflation levels that tend to reduce real salaries." The second is "to restore the population's incomes that have been extremely damaged by the last three years of the pandemic, international crises and a big price offensive by business sectors."

"Inflation does not only have a monetary root ... there is an impact from the rise in food and energy prices at the international level, which accelerate the inflationary process," he said, adding that "there are also the oligopolistic sectors and a distributive struggle between different sectors of society" in Argentina.

Regarding the lack of foreign currency, the expert said the country needs to manage the "complicated situation of international reserves" with local productivity.

For Aronskind, the situation "requires a very forceful public policy, a package of measures to cut inflationary inertia."

Meanwhile, the economist also underscored the potential of the South American country's relations with China and the greater productivity generated from the complementarity between the two sides.

"The potential for cooperation between Argentina and China is enormous because, in the case of Argentina, there are many pending issues in terms of infrastructure and technological development," Aronskind said.

"Argentina has an incredible productive potential" and "needs a partner" to help unleash it, he added, noting, in particular, the Belt and Road Initiative proposed by China, to which Argentina is a signatory.

"For example, China is collaborating with some Argentine provinces in lithium transformation. There is a huge, productive potential, which seems to be the role we expect China to assume in support of our own development," he said.

"China can play a very prominent role," and there can be a precious "mutually beneficial relationship," Aronskind said.