Fynsa
During the week we learned about a series of reports that placed Chile as the only economy that, during 2023, was not going to show growth within the region. Other international organizations have mentioned the same thing, which has generated a series of criticisms and a search for culprits. Without wanting to lower the profile of how important growth is, especially in a small economy like ours, I believe that this discussion is somewhat useless and makes us lose focus of what is really important.
First of all, it should be mentioned that the projections that place Chile in a recession next year are not new. For some time now, the market, including the writer of this column, has been publishing macro scenarios in which the economy would shrink during 2023. At the same time, the Central Bank of Chile has been warning the same for a couple of months now, while the Ministry of Finance, through the Budget Office, also anticipates the same according to the most recent Public Finance Report. Therefore, beyond the fact that international organizations have mentioned it in their latest presentations, there is nothing new.
Secondly, the search for culprits should be an exercise that should be maintained in the political debate and should not permeate the technical or economic debate, since we understand the conditions in which the imbalances we are facing today were generated, who were their precursors and what their motivations were. I would emphasize that, regardless of the political position, a large majority understands that adjustments must be made to fix those imbalances and that many of them could be painful. Some institutionalism remains.
Third, we keep forgetting that after those imbalances have been resolved, the growth capacity of our economy is very low.. This is what is called trend GDP, an estimate that economists make to measure the productive capacity of a country if all the resources are being used and the rest of the macroeconomic variables are at their long-term values. Factors such as education, the improvement of productive processes, the availability of infrastructure and favorable conditions to develop business, legal certainty and a widely accepted social contract are necessary conditions for this growth capacity to be greater. Therefore, even though we may be filled with policies that promote short-term growth, if this is not accompanied by a similar or greater increase in long-term growth, it will unfortunately end up generating imbalances and painful adjustments for the population, especially for the most vulnerable.
Therefore, it is urgent to bring to the forefront the discussion of how we increase our capacity to grow, it is therefore urgent to bring to the forefront the discussion of how we increase our capacity to grow. Of course, this should not be done in any old way; in the end it is society that defines the conditions under which growth should be increased: environmentally friendly, inclusive, egalitarian, or whatever conditions are desired, but if we continue to remain in the short-term debate, the search for all these objectives will be useless. if we continue to remain in the short-term debate, the pursuit of all these objectives will be useless.
