Inflation is accelerating again in Argentina. In September it was from 3.5% month-on-month, one percentage point more than in August, and with only one quarter to close the year, it has already accumulated 37% so far in 2021. The rapid rise in prices is even more felt in food: in September 2021 they cost 53 , 4% more than a year earlier, according to data from the National Institute of Statistics and Censuses (Indec). The Government of Alberto Fernández wants to prevent inflation from winning the race for wages in the final stretch of the year, marked by the legislative elections on November 14. To achieve this, he has returned to the offensive with an old weapon: the control of food prices, in the hands of a new Secretary of Internal Trade, Roberto Feletti.
Feletti has maintained contacts with food manufacturers and supermarkets to keep the prices of 1,245 products fixed until next January 7. Milk, flour, oil, rice, bread and other products of the Argentine diet are part of the long list announced by the Secretariat.
“We had a hard year and we need to generate a truce in the last part of the year so that wages begin to rebuild after four years of decline,” said the Minister of Production, Matías Kulfas, defending the price freeze announced by the Government within the framework of the Idea business conference. When Fernández became president of Argentina in December 2019, the basic food basket represented 9% of the average salary of the country’s registered workers. Today, it represents 11%. “The social balance of Argentina depends on this pressure on wages from food to go down,” agreed Feletti.
The loss of purchasing power of Argentines worsened last year, when the economy plummeted 9.9% as a result of the stoppage of activities decreed by the covid-19 pandemic. Poverty grew 6.5 percentage points to 42% of the population, the highest figure since the 2001-2002 corralito crisis.
The increases approved in 2021 for the minimum wage, pensions and collective sectoral negotiations (known in Argentina as joint) sought to reverse this situation. However, its success depends on inflation not accelerating, a condition that few believe possible given the high monetary issue.
“We need to stabilize our country. We have been going from crisis to crisis for 20 years. It is fundamental because all the crises have made us poorer and poorer for the popular sectors, ”said Gildo Onorato, general secretary of one of the great social movements in Argentina, the Union of Workers of the Popular Economy at the Idea Colloquium. . The figures support this: in the first semester of 2021, poverty fell by only 1.4 percentage points, still far from the pre-pandemic 35%.
The strategy of freezing prices has numerous antecedents in Argentina. Raúl Alfonsín, Néstor Kirchner, Cristina Fernández de Kirchner and Mauricio Macri approved before Alberto Fernández measures to temporarily stop the rise in food and / or basic service rates. They were effective in the short term, but failed in the long term by increasing fiscal imbalances.
The new plan announced by the Government lacks for now an official resolution that makes it mandatory to keep prices fixed, which increases doubts about its compliance, especially as the Christmas holidays approach.
At the same time, the cost of electricity, water, gas and public transport also remains unchanged for Argentine households at the cost of increasing state subsidies. Rates will increase again in 2022, when the Executive plans to begin applying segmentation according to the payment capacity of users.
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