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The “war on inflation” does not stop the soaring prices in Argentina

Buenos Aires, April 13 (EFE).- The “war on inflation” announced by the Argentine President, Alberto Fernández, almost a month ago, has still not managed to stop the escalation of prices in the South American country, where there is growing greater political and social discontent with this macroeconomic problem. As published this Wednesday by the National Institute of Statistics and Censuses (Indec), consumer prices in Argentina experienced an annual increase of 55.1% last March, 2.8 percentage points above the change reported in February. Likewise, in the third month of the year, consumer prices increased by 6.7%, compared to last February, the highest rate in the entire historical series (from January 2017) and which continues five months of accelerating inflation. The indicator gained particular momentum in March due to the return to school (monthly increase of 23.6% in the education sector), as well as the change in the clothing season (10.9%) and the increase in electricity, gas and water costs in most countries. regions (7.7%). Food and non-alcoholic beverages moderated their growth and recorded a monthly increase of 5.7%, or 1.8 percentage points less than the previous month, although in the first three months of the year, they cumulate an increase of 20.9%. A LOST “WAR”? In recent weeks, the Argentine government has launched a battery of measures to contain the unstoppable rise in prices, the biggest macroeconomic problem facing the country after the ratification of the debt refinancing agreement with the International Monetary Fund (IMF ). This set of initiatives included a reduction in prices in supermarkets, an increase in food subsidies for the most vulnerable people, the creation of a trust to stabilize the price of wheat and the opening of the negotiation of wage agreements between unions and employers. Some measures in addition to those already agreed in the program with the IMF: reduction of the budget deficit, restriction of monetary issuance and reinforcement of the reserves of the Central Bank (BCRA), actions which would contribute to curbing the galloping inflation of the macroeconomic “front”. The Argentine Minister of Economy, Martín Guzmán, explained last Monday that this worrying rise in prices is due to two factors: one external, motivated by the Russian invasion of Ukraine, and the other internal, which is conditioned by inflationary “expectations”. “Today, the main concern of economic policy is the problem of inflation and ensuring a recovery in real income, and in this sense, this is where it is very important to give certainties instead of generating uncertainty,” Guzmán said in an interview with the C5N news channel. NEED FOR CONSENSUS During his televised intervention, the Head of the Economy insisted on the need to generate a political consensus around economic policy, at a time of strong dissension within the ruling party, whose division has clarified after the approval of the agreement with the IMF. “Inflation is attacked with macroeconomic policy and two issues arise here: on the one hand, an economic program, which already exists today, and on the other hand, political support, because the economy does not work not in a vacuum, but in a context of power. If politics is disorderly, it is much more difficult to achieve anything, “he said. In this sense, Guzmán stressed that his permanence in the cabinet is “almost obvious” and demanded that all members of government respect the “direction” of current economic policy, without actions that “generate noise”. “There needs to be clear political support, instead of carrying out actions that generate of uncertainty. When there is uncertainty, those who make the decisions do not know very well what the direction is, and that is where the problems get worse and it hits inflation,” said the minister. HORIZON WORRYING In any case, the near horizon is not very promising: the analysts consulted by the BCRA have raised their forecast for sales price inflation to 59.2% for this year, while in 2023 it would reach 47 .5%, according to the latest Survey of Market Expectations (REM).Figures that are far from what had been agreed with the IMF, which set inflation ranges of 38-48% for 2022 and 34-42% for the following year. This pressure on prices eventually raised discontent in the streets, with an increasing number of demonstrations in Buenos Aires and other cities of the country, where thousands of people demanded an extension of the programs of social assistance Javier Castro (c) EFE Agency

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