“at the end of the pandemic there may be a cataract of layoffs”


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The head of the consulting firm OJF & Asociados, Orlando Ferreres, gave very harsh forecasts for the most sensitive economic and social variables. He did so in the framework of a virtual meeting with Cordoba businessmen organized by the Mediterranean Foundation. Ferreres addressed multiple issues, but placed special emphasis on raising the need to reconstruct the conditions for private investment, as a prologue to a sustained and sustainable economic recovery. At the same time, he predicted that inflation will escalate in the coming months, although he ruled out hyper inflation and considered that strong increases in unemployment and poverty levels are coming.

“How do you think the current policy of limiting the layoffs of the national government continues?” Was one of the questions that was asked of Ferreres. “Basically I think the government does not have many options, it did not create a fund like in the construction sector, where there is a fund for unemployment. Something like that in the rest of the sectors is not counted. Consequently, it is going to be complicated because there are no funds made for the moment and it cannot be created now, such a fund could be started now, but it would not have resources initially or would have a very small amount. I think they will continue with this policy for a few more months, with a little more delay, but they will not delay the reality of unemployment because it will happen anyway. It is a matter of what the government can do more than the government should. What should be done is a mechanism by which all sectors save an amount for when unemployment is activated, but that was no longer done. I think the government is going to continue with prohibitions and such things, it will not be easy. ” And expanding on that line Ferreres remarked that he believes that at the end of the pandemic “there may be a cataract of layoffs that can increase unemployment by 10% to 15% more. We are going to figures like the ones we have had in the past and they have been very painful. The problem is that today there is no solution to a problem that is posed in practice, social life is going to be complicated ”.

Investment. Ferreres is an investment specialist and in this field he recalled that after 1930 the average direct investment in the country stopped being 36% of the GDP, it began to be located around 18% of the Product, until reaching the current point of being 12% of the Product. “Before, we were growing at an annual rate of 5% and we had a high per capita income, which made Italians and Spaniards come because here they earned double or triple. Today the rate of investment fell, that makes us grow very little or nothing. There are examples of innovation and investment such as the VW gearbox factory in Córdoba, but today we are discouraging any investment. It is a serious problem that must be changed soon. Today the most serious current problem is poverty and unemployment and working to improve the real salary that this year will fall 11%. For this, the only way out is to improve investment by the private and public sectors. The investment has to go up from 12%, I am not saying to 36% as we had, but at least 25% of the Product. If we achieve this investment, we can consider that we went to the other side of the river, to Uruguay, ”he said.

Inflation. Ferreres works with an inflation forecast for 2020 of 45%, with the aggravating circumstance that he is not considering in this forecast a total unfreezing of relative rates and prices. “We only consider some sectors, such as telephony. Now, the fact that we have such a large issue worries from the point of view of inflation for the coming months. We are forecasting months of 4%, 5% inflation that would start in September to complete 45% for the year. It may sound optimistic for many who say hyperinflation is coming, something that is not real. There are no conditions for hyperinflation. One problem is that devaluation drags half of it to inflation. If I devalue 10% I can have 5% inflation for the following month. This means that the devaluation that we have had since January has been creeping in, but I would not expect disproportionate inflation, it will be less than last year, “he stressed.


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