NewsWhore
03-31-2011, 05:40 PM
In today's Diario Libre, economist Gustavo Volmar writes that the real economic issue is not the ratio between tax revenues and the GDP mentioned in the IMF statement on the 5th Stand by Arrangement review, but the ratio between public spending and GDP. "Given the composition of that spending, mainly wages, subsidies, promotion and other current expenditures, the real contribution to the increase in productivity and the strengthening of productive sectors is reduced," he explains.
He says that the more the government spends, the greater the gap between exports and imports and the greater the proportion of GDP made up by services. He writes that this makes the country more dependent on loans and foreign investment that have come stimulating sectors that pay low taxes. He says this situation is so pronounced that while the IMF in its review comments calls for more tax revenues, it backs the increase in the interest reference rate. He says this implies that the IMF thinks that the GDP is growing too fast and that the monetary policy needs to be more neutral.
More... (http://www.dr1.com/index.html#14)
He says that the more the government spends, the greater the gap between exports and imports and the greater the proportion of GDP made up by services. He writes that this makes the country more dependent on loans and foreign investment that have come stimulating sectors that pay low taxes. He says this situation is so pronounced that while the IMF in its review comments calls for more tax revenues, it backs the increase in the interest reference rate. He says this implies that the IMF thinks that the GDP is growing too fast and that the monetary policy needs to be more neutral.
More... (http://www.dr1.com/index.html#14)