The Argentine inflation For the month of October it was 6.3%, as announced this Tuesday (15) by Indec (National Institute of Statistics and Census). The index accumulated in the year in its tenth month is 88%.
Special advisors estimate the state will close the year at a number close to 100%. Argentina has the second highest inflation rate in the region, second only to Venezuela, at 119.4%.
The products that experienced the largest increase in this period were food, clothing, and services.
Although the country implemented a new temporary freeze a few days ago, the program Fair priceswhich would last for four months, the measure was unable to contain the rise in products.
Argentina has already tapped the resource this year on two other occasions, with two sponsorship pricing releases. This time, there are 1,500 products that cannot be increased in the coming months.
At this time of year, “inflation has been growing by inertia, and we’ve already considered this increase due to scheduled adjustments to gas, electricity and transportation services,” says Jeronimo Montalvo of Empiria Consulting.
Besides the fair prices program, in recent days the Minister of the Economy, Sergio Massa, has announced some measures to try to contain the loss of purchasing power of the population.
One of them was a 15.6% increase in pensions, pensions and social assistance schemes. In addition, a bonus of 10,000 Argentine pesos (about $60 or R$330) has been approved for the months of December, January and February for people who earn less than minimum wage, and one of 7,000 pesos (about $42 or R$230) for those who They are paid the equivalent of a minimum wage.
“Inflation is a big problem for most Argentines, especially for those who are retired or those who receive state pensions and aid. We are protecting them,” Massa said.
However, in recent weeks, there have been almost daily demonstrations in front of the Economy Ministry and other ministries in downtown Buenos Aires, demanding that the government make more social plans to meet the moment.
During the week, there was a 24-hour layover by doctors, nurses and assistants in public hospitals in Buenos Aires. Professionals wore white uniforms from the Obelisk to the Plaza de Mayo. The strike is alarming, at a time when the country is witnessing a rise in the number of hospitalizations due to the arrival of the new variant of Omicron, COVID-19, and an increase in influenza cases.
In the previous week, there was a stop in public transportation. The class union is planning a new strike in the next few weeks, if their wages are not adjusted above inflation. One of the most troubling categories is that of truck drivers, who achieved a 107% adjustment, but were not renewed after August.
For the Deputy Minister of Economy, Gabriel Rubinstein, Argentina faces the risk of hyperinflation “if we do not continue to fight to reduce the fiscal deficit and monthly inflation data.”
Rubinstein, for the time being, rules out devaluation, although in practice it is already happening. One of the signs is the difference between the values of the official dollar (160 pesos) and the so-called blue (parallel) of 297 pesos.
Rubensti defended the policy of price freezes, despite criticism from several economists and private advice.
“It’s a great tool for trying to slow down inflationary stagnation. It’s an important piece to improve the economic health of the country in the coming months. Obviously the intention is not to eliminate inflation, but to prevent it from hurting other aspects of the overall economy as well as helping people who suffer the impact of higher prices.”
The need to increase social spending to contain popular discontent puts negotiations with the International Monetary Fund (IMF) in jeopardy in order to reach an agreement to repay Argentina’s $44 billion debt with the Fund.
What has been agreed is that the government should make adjustments to the economy and reduce the fiscal deficit and inflation. Little of this has been achieved, which could lead to a new impasse between the government Alberto Fernandez And the entity.
Politically, making the amendments required by the International Monetary Fund will have electoral consequences, as the government, which has lost its credibility and whose popularity is less than 20%, begins in a few weeks to determine its options for the candidate who will run in the 2023 presidential elections. Fernandez himself, his deputy Christina Kirchner, Minister of the Interior, Wado de Pedro, and Governor of Buenos Aires Province, Axel Kiselov, former Minister of Economy.
The opposition, despite the current support, is still facing internal friction to determine its candidate, who is, at the present time, between the former president. Mauricio MacriMost likely, the President of the Buenos Aires City Government, Horacio Rodríguez Larreta, and the former Minister of Security, Patricia Bullrich.
In the past five months, Fernandez has lost seven ministers, most of them from the political sphere. While he advocates a moderate profile in the portfolio, Cristina’s will prevails, who has supported Massa even as he, among other things, puts negotiation with the IMF in the background and contains public discontent with social spending programmes.
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