In January, the increase in Food and non-alcoholic beverages (4.9%) was the one with the highest incidence in all the regions. In this item, the most relevant was the increase in Vegetables, tubers and legumes, in which tomatoes, lettuce, potatoes and onions stood out, among others. In the first month of 2022, the increase in Fruits also stood out within the division, especially lemons and oranges.
At the inauguration of the new period of regular sessions of Congress, President Alberto Fernández said that “Inflation is the big problem that Argentine men and women have at this time and without a doubt it is also the main concern and the main challenge that the Government has.”
The Government defined that the drop in inflation is its main concern and challenge. In the agreement with the IMF, it promised to face it with a “comprehensive approach”, to tend to a range of between 38%-48% in 2022. However, analysts consulted by Ámbito consider that this goal will be breached, although this does not will not affect disbursements or quarterly reviews.
2021 closed with an inflation of 50.9%, the second highest since the hyper. To begin with a gradual reduction year by year, the Government bets on a package of measures: lower the fiscal deficit to 2.5% of GDP, reduce the monetary issue to 1% of the product, accumulate reserves for US $ 5,800 million and set expectations with price and income policies, as detailed in the memorandum of economic and financial policies.
The agreement provides for the dollar to accompany inflation so as not to lose competitiveness, and a rise in rates to lower energy subsidies by 0.6% of GDP, the largest cut to lower the deficit. For Delphos Investment, the rise in electricity and gas rates of up to 60% in the AMBA could add 1.5 points to inflation “due to indirect effects on the prices of other goods and services.”
For his part, Claudio Caprarulo, director of Analytica, added that the inflationary scenario is “increasing” due to the international crisis, and the rise in the price of commodities. “Wholesale inflation in January was even higher than retail inflation, with all agricultural products above 7 points, and in February that will be seen again. The United States projects 7.9% inflation for February. Argentina is not going to be isolated from that”, anticipated the economist. At the consultancy, he forecasts that inflation will end 2022 at 57%.
Meanwhile, Lorenzo Sigaut Gravina, director of Equilibra, assured that the contractionary fiscal and monetary policy help in lowering inflation, but not in the short term: “Monetary and fiscal policy is usually ineffective when inertia is very high . Even those who believe that inflation is exclusively a monetary phenomenon recognize that monetary policy operates with a lag, with a delay that can reach 12 months”.
“It will be difficult to break the inertia and convince that salaries have to grow around the official guideline, last year the unions accepted it, they closed at 35% and then it became obsolete, a silver bullet was lost to coordinate expectations” Gravina added. For Caprarulo, to anchor expectations the plan has to be “credible”, and that will happen after “the revisions are fulfilled”. The REM of the BCRA projects an inflation in 2022 of 55%.
Source: Ambito
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