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However, the expansionary macro-economic policy pursued in 1995 led to a resurgence of inflationary pressures in the middle of 1996, which resulted in year-end inflation of 56.9% in 1996.
From 1994 to 1997 there was a period of repressed inflation. Many of the prices (energy, gas, fuel, etc.) were not true, in the sense that consumers were paying less than the related costs to producers. The difference was found in the growth of the deficit in the balance of payments, in the budgetary deficit and in the huge losses reported by large state-owned companies.
Chart 1
Source: National Institute of Statistics
The exchange rate liberalization and the energy price adjustments of the first half of 1997 resulted in a steep increase (100%) of the price level...
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