One of the few certainties that Argentines have about their economy is that in the middle of each month the National Institute of Statistics reports how much purchasing power their salaries have lost. The Consumer Price Index is expected counting the minutes and then all the news programs open. The last one, published this Wednesday, was the highest in three decades: a 12.4% price increase for August alone caused the year-on-year index to rise to 124.4%. The next report is scheduled for October 12, 10 days before the presidential elections. With the challenge of having the Minister of Economy as a candidate, the ruling Peronism finds it increasingly difficult to deliver bad news. This Friday, he announced that he will give inflation data weekly. It will not replace the CPI which is published every 30 days, but the Government hopes that weekly monitoring will ease the blow.
“Weekly inflation in decline” was the title chosen by the Secretariat of Economic Policy in the tweet in which it announced its first report. Argentina, according to the estimate of the Ministry of Economy, registered weekly inflation of 2.1% between September 4 and 10. It is the best data in more than a month. Last week, the country registered a CPI almost the same as Spain’s year-on-year, but it came from a peak of 4.8% in mid-August, similar to one-year inflation in countries like Mexico or France. “Although the weekly value is still very high, it is now much more in line with values prior to the devaluation of the month of August,” Economía explained.
August was a very hard month in Argentina. The ruling Peronism came third in the open primaries on Sunday the 13th, in which the ultra Javier Milei capitalized on the discontent and came first, and the next day he had to navigate through the confusion. That post-election Monday was black: the Government devalued the peso by 18%, the Central Bank imposed a record increase in interest rates of 20 points, up to 118%, and the catastrophe was transferred to prices. The 12.4% rise in inflation for August alone meant the highest price increase in a month since 1991, when the country left behind the last hyperinflation, and a blow for the Government candidate, Economy Minister Sergio Massa , which needs to sell some hope to an electorate that in the primaries preferred a radical right that strongly promises a fiscal adjustment or did not go to vote at all. In the double digits of the August CPI there are chilling data, such as 15% increases in food and health expenses.
A presidential candidate with his hands on the tiller, Massa has been restless looking for a comeback. In recent weeks, it has announced special bonuses for formal workers and credits for informal workers, a 21% VAT refund for workers who make their purchases with debit cards and has raised the income tax floor so that they leave it to pay many employees. The measures have been cannon fodder for the opposition in the week in which the Government must present the general budgets for 2024.
Few things can hurt the presidential aspiration of Peronism more than a bad CPI almost a week before the elections. Independent consultants are already predicting another index above double digits for this month, with the country reminding its candidate that it had set the goal of stabilizing it around 4% when taking office at the end of July last year.
The index that Economía will publish every Friday starting this week will not replace the monthly report of the National Institute of Statistics, and the Secretary of Economic Policy, Gabriel Rubinstein, has stated that its numbers will be “totally independent” of it. Published two days after the August CPI, the Economy index estimates “that the weekly inflation records will accentuate and consolidate their downward trend in the next measurements.” The Government wanted to give good news this Friday, but from now on it will measure daily distress with a more detailed index. The CPI has accumulated an increase of 80.2% so far this year and poverty affects more than 40% of the population.
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