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Supermarkets anticipate that there could be remarks of up to 50% after the end of Fair Prices

Supermarkets anticipate that there could be remarks of up to 50% after the end of Fair Prices

The economic outlook under the new president’s mandate Javier Milei appears distressing for Argentines, marked by a critical fiscal situation and a inflation uncontrolled that it seems will not give truce. The head of state warned about the imminent need to implement a “shock“fiscal, focusing on restructuring State spending without affecting the private sector, emphasizing the shortage of funds. “There is no money,” he says.

The analyzes of various consultancies such as GMA Capital Research They underline the seriousness of the macroeconomic situation. Despite inflation already reached historical levels in the last 30 years, projections do not anticipate improvements, especially due to the delay in updating regulated prices. These gloomy prospects predict a possible inflationary peak of the 260% by the second quarter of 2024in addition to a continuous economic decline until the fourth quarter of that same year, according to Focus Economics.

The current indicators do not provide comfort to citizens, since the pressure on pockets will be persistent and signs of economic relief do not seem to appear on the near horizon. The forecasts of private economists, compiled by the Survey of Market Expectations of the Central Bank, suggest that inflation will continue its escalation and it is estimated that it could close the year 2023 at around 185%. Something that almost doesn’t make sense anymore after Milei’s words during his inauguration.

“The increases never stopped. All lists come with price increases. Of all kinds,” say supermarket sources from the interior of the country in statements to Ambit. He adds that the situation varies depending on “the situation of each company“But the increases range from 5% to 40%, and that, in the 11 days of December, most foods have already increased by at least 15%.

When asked which products increased their value the most, the source adds: “The one that was a little delayed today, Tomorrow he will send you a list with the 40% increase. It is generalized. No one can be left behind because they would lose a lot of money in a few days. It is not a problem of sectors or products. It’s the adjustment Milei talked about yesterday. This is going to be long.

Inflation: what to expect and what’s coming

According to the evolution of prices recorded during the first 11 days of December, the sincerity has already begun and will not stop. The question that arises now is what will be the ceiling of those values ​​or what will stop them. This Monday, measures were expected to somewhat calm the uncertainty that is taking over the market, since both buyers and sellers need to determine reference prices, an agony that lengthens as the new Government kicks off the announcements.

Thus, the first week of December closed with food inflation of 7.4%assures this medium Melisa Salaeconomist Labor Capital & Growth (LCG), “marking the highest record since we began the survey.” This increase, he explains, adds to increases “already high in the previous two weeks: 4.3% and 3.3% respectively.”

Consumption Inflation Gondolas Basic Basket Supermarket

Mariano Fuchila

Altogether, “the accumulated inflation in the last 4 weeks amounts to 17.5%”. For Sala, these increases have been notably widespread, since 53% of the products surveyed experienced an increase in the week, suggesting that the entire basket would adjust at least twice a month. “This trend reflects a growing inertia that accelerates over time,” warns Sala.

The analysis made by the economist coincides with the minimum test of Fernando Savorespokesperson for the Federation of Grocers, who testified that “everything that is a price list, last week, it was tremendous, but tremendous. They killed us, literally. Prices changed between 30 and 50%“. The representative of the sector adds that “he cannot believe the increases” that are taking place and laments: “I think the ceiling has already hit it, but it seems that I am wrong, since it continues to rise”, as noted above, The increases will not stop.

Fair Prices: the end of the program and its transfer to the variable

This situation will worsen even more after the end of the program Fair Prices. This scheme, designed to stop the excessive increase in Consumer’s price indexcame to an end, which will surely trigger further increases in commodities.

In view of the elimination of controls, the release of previously contained prices and preventive adjustments to maintain margins on products that have already experienced increases, “a marked increase in inflation is expected in the short term“says Sala.

And he adds: “The success of the Government in anchoring expectations through the fiscal adjustment announced in numbers, although not entirely clear in its applicationwill be fundamental,” says the analyst before warning that: “Our projection indicates an acceleration of inflation in the coming monthsand it will be relevant to observe how the measures announced to contain this trend develop.”

In summary, the economic challenge that Argentina faces under the Milei Government is monumental, since the only variable that was never talked about is salaries, who will continue to pursue runaway inflation. Economic forecasts paint a gloomy scenario and the prospect of an economic contraction will demand quick and forceful decisions to reverse a social catastrophe.

Source: Ambito

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