Sergio MassaEconomy Minister and presidential candidate for Union for the Fatherlandseems to have learned from his previous forecasts about inflation and now avoid risking specific figures. Instead, his strategy seems to focus on stabilization of prices and use it to your advantage.
This Thursday will be known inflation data for the month of June. From the ruling party they expect a slowdown that will mark the way from here on out. Nevertheless, for Massa it is more than important information for his run for the presidency.
Massa expects whate inflation decreases in the month before the primary elections (STEP), something that matches the forecasts of private consultants who project a slowdown in the CPI for the coming months, although not very significant.
Sothe objective is “stabilization” during the campaign. In this sense, they launched some measures to promote consumption and address inflation, such as raising the cap on cbank yield and reduce the interest rate of the “Ahora 12” program. there is also agreements with food companies, manufacturers of household appliances and clothingall this to contain price increases until after STEP.
However, challenges could arise after the primaries, since seasonal factors could work against stability. Mass’s goal is to obtain a positive result in the STEP that allows you to maintain stability later on.
Both the Government and private consultants project a slowdown in prices in June, with a particular focus on the Food and Beverage industrywhich is expected to continue increasing at a more moderate rate. This trend is partly due to the approval of a 5% increase for products in supermarkets from August 15.
Sergio Massa: the bet for the PASO
Government is betting on easing food prices for the benefit of citizens. According to the Secretary of Commerce, the focus will be on price controlsespecially in the products of massive consume until mid-August.
Nevertheless, there are seasonal variables that modified their impact on Massa’s strategy. One of the most significant factors is the price of meat, which experiences sudden changes in its cycle. During the last quarter of 2022, the increase in the price of meat was three times less than the average for food in general. However, in summer, its increase accelerated. Due to the important weighting of bovine meat in the basket of the Consumer’s price index (CPI) of the Indec, each time there are increases in butcher shops, this directly impacts the CPI. However, as of May there has been a change in this trend: the price of the roast hardly had a variation of 1.7%, and the rump of 2.1%.
However, the Government has already used several of the tools at its disposal to avoid an uncontrolled rise in pricesand with the primary elections on the horizon, you have few remaining options.
So, Massa’s goal is directly in prices, the interest rate and also in avoiding a sudden change in the parallel exchange rates. Those are the three battle fronts that the minister and candidate is attacking since his administration and his electoral campaign.
In short, the Government is implementing measures to control the escalation of prices, especially in the food and beverage sector. Although a slowdown in prices is expected, it is recognized that the margin of action is limited. Price stabilization strategies are part of the political strategy of Sergio Massa and his team, those who bet on showing favorable results in inflation during the election campaign.
Source: Ambito
