Dunn Highlights Need for Public Spending Cuts | Dunn destaca la necesidad de recortes en el gasto público

By La Patria:

Jaime Dunn, analyst

According to Dunn, the projected fiscal deficit is 11%; the analyst warns about the urgent need for cuts in public spending.

Economic analysis: Dunn highlights need for cuts

Economic analyst Jaime Dunn questioned the economic policy of the government of President Rodrigo Paz Pereira. In an interview with LA PATRIA, Dunn pointed out that so far there is no clear definition of the course the administration intends to follow in the face of the crisis. He also stressed the urgent need to carry out a cut in public spending.

Lack of a clear strategy in the face of the crisis

Dunn stated that the Executive has still not determined whether its strategy is aimed at managing the current crisis or undertaking long-term structural changes. “What we have seen so far are more measures to treat the symptoms and not the disease,” he said.

General State Budget and its limitations

Regarding the General State Budget, the analyst acknowledged progress in the presentation of clearer and more understandable data. However, he considered this to be insufficient. “The crisis will not be solved with clarity alone, but with actions. This budget sends us the message that the government has decided to manage the crisis this year,” he indicated.

Origin of the economic problem

Dunn explained that the origin of the economic problem lies in a complex energy scenario. This scenario is characterized by the lack of natural gas, as well as the limited capacity for fuel production and imports, which has resulted in a chronic fiscal deficit.

Necessary measures to confront the crisis

In that context, he warned that the solution requires deep measures, such as a drastic reduction in public spending. According to him, this measure is not currently being applied. “A gradualism has been chosen that carries many risks, because someone has to finance that wait in order to make decisions,” he noted.

Political impact and external factors

Dunn also warned about how this approach can weaken political support over time. In addition, he mentioned that external factors, such as international conflicts, can negatively impact the economy.

Fiscal deficit projections

The analyst questioned the magnitude of the projected fiscal deficit. He indicated that, beyond the official figures close to 9%, the real calculations could place it at around 11%. This would reflect the absence of substantial improvements compared to the previous administration.

Urgent decisions in light of the severity of the crisis

Dunn emphasized that the severity of the crisis demands decisions of the same magnitude. This includes cuts in public spending, salaries, state investment, and the restructuring of loss-making state-owned companies.

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