Price increases and sacrifice: economists react to the presidential speech

Experts in economics agreed that the measures announced by President Luis Abinader to address the international context will have direct effects on the cost of living for the population, especially in a scenario marked by global uncertainty.

Economist and candidate for the School of Economics at the Autonomous University of Santo Domingo (UASD), Ana Victoria Peña, considered the president’s speech encouraging, although she warned that geopolitical conflicts will impact both the national budget and product prices. She explained that, despite the intention to maintain subsidies, the increase in transportation costs, raw materials, and freight will cause inflation that will affect the entire population. In addition, she warned that the fiscal deficit could exceed the 3.2% forecast if the international crisis is prolonged.

When referring to the so-called “sacrifice”, Peña indicated that the Government seeks to buy time in the face of insufficient income to fully address the situation, which is why he appealed to the prudence of families in the management of their expenses.

In the same vein, economist Carlos Cuello stated that the reduction of subsidies and the possible transfer of taxes to fuels will directly affect the increase in prices and will affect the family economy.

However, he considered the measures necessary to avoid more serious consequences. “If this set of measures were not taken, the economy would feel the effects of continuing to postpone a problem that does not solve itself,” he stated.

Cuello explained that the “sacrifice” to which the president refers implies a reduction in consumption due to the increase in the price of products, but emphasized that this must be shared between the population and the State.

“While the population sacrifices itself, it is not fair that there is waste perceived from the Government. That sacrifice must be from both sides,” he concluded.