Francisco Barberis Bosch


August 2021

fbarberisbosch's insights

  • A tale on high inflation


    Inflation February 4.7%. It is high, but it is worth remembering where it comes from. High (higher!) monthly inflation started at the beginning of 2018 and reached +6pp. It only receded due to covid lockdowns and the 10pp recession in 2021. But that was of course temporary. We never got out of that new economic regime/functioning. From May 2021, monthly inflation has been paired with economic reopening & recovery. Margins up now that there is demand, prices up as business reopen, etc. High inflation in 2018-19 was due to the balance of payments crisis and triggered a strong recession; high inflation now has strong inertia but follows economic growth (recovery) which always poses inflationary pressures. So on average, monthly inflation is not significantly different now than it was from II-2018 to IV-2019. It is more stable now, though. As economic activity recovers to pre-2018 crisis levels, only now can we expect a more stabilized situation. Dollar & Inflation The other side of the story is the external constraint. Inflation peaks have been related to the largest increases in the parallel dollar, reflecting BoP crisis and/or pressures (e.g. imports controls). Only very recently, after the IMF agreement, has the parallel dollar...

  • Inheritance Tax & Energy Subsidies


    Facing insignificance Inheritance Tax revenue is currently 1.200 million ARS in Bs AS Province, which accounts for 40% of the total population. Even assuming it was 10.000 million for the entire Nation (overcorrecting for a 3x factor), it would barely account for 1% of the +1.000.000 million ARS that will be spent on Energy Subsidies this year. Even a 10% cut (& partial re-assignment) in the very pro-rich energy subsidies would be 10x times more progressive than this Tax, with many other side effects regarding macroeconomic...