The Three Sins
2026 will be a year of economic turbulence. Photo: Image generated with artificial intelligence.
TL;DR
- The government's actions have attacked inflation targeting, fiscal rules, and the free exchange rate, jeopardizing economic stability.
- Indirect inflation increases are attributed to higher labor costs from minimum wage hikes and labor reforms, impacting business profits and leading to price rises.
- Excessive public spending has resulted in a large fiscal deficit and high public debt, violating fiscal rules.
- Financing public debt through external sources has led to currency revaluation, contrary to global trends.
- The government appears to be overstepping the central bank's functions concerning inflation and exchange rates.
- Short-term perceived economic gains may be followed by negative impacts on employment, informality, interest rates, tax collection, and household purchasing power.
- The article argues that excessive debt, currency revaluation, and increased inflation disproportionately affect vulnerable populations.