A report prepared by Focus Market sought to show the increase in the basket of basic services such as electricity, gas, transportation, internet, health that Argentines have been facing and will have to face in the coming months. In that sense, the analysis calculates what the price variation will be from the elimination of subsidies and price deregulation based on an inflation forecast of 18% monthly average inflation.
To exemplify how inflation will increase the cost of various services We take the case of a family of 4 members (two adults and 2 school-age children), and what would be the impact on price variation from the elimination of subsidies and price deregulation.
Basic services
In the case of basic services like electricity in November 2023, a family that paid an average of $11,533 pesos, by March 2024 will be paying $55,012. The removal of subsidies in electricity rates still provides for the electrical segmentation of low-income brackets, which would have consumption limits and even a subsidy level. In the case of high and medium incomes, a path of paying the full rate will be followed.
In the case of gas and water, where they would end up paying $24,556 and $11,100, pesos respectively (as of March 2024, rates are expected to be recomposed to real values by at least 200% and it is expected to be in 20% tranches following average inflation). This is at least what they presented distributors in public hearing and is still pending approval.
Rent
Other services that take into account in the basket are the Rent (The reference for a typical family is a 3-room apartment. In November 2023, its value was approximately $232,284, and by March 2024 its average value will be $495,323. Since the repeal of the Rental Law through official DNU, it is expects that these will be agreed between the two parties to the contract and will not be outdated as is currently the case. expenses It is considered that the values would go from $35,441 to $75,575, foreseeing a strong impact on the common use services of private consortia.
Transport
With respect to transport, the case of taxi use was taken (it is assumed that the family uses it occasionally at least once a week), public transport with 1 combination, and private car with fuel consumption from the suburbs to CABA. Based on this, a value of $52,517 is expected in the monthly case of the taxi (the last increase was 49% and more increases are expected), in the case of fuel a cost of $122,888 is expected (at the beginning of January 2024 it was adjusted 27% per liter of gasoline and another 10% at the beginning of February 2024), and for the cost of public transport A value of $14,723 is calculated (this is due to the fact that the increase was from $43 to $270 per ticket and more increases are expected in relation to inflation).
In this case we average use of taxi, private car and public transportation. In many cases, full public transportation without the use of other means can be three times the nominal monthly cost than that mentioned in this report.
Other services
Finally, other services that will have significant increases are cable connection, streaming and internet, which go to values of $22,251 and $22,852 respectively, thus implying increases of more than 14%. Even more adjustments are expected in real terms.
On the other hand at prepaid They can be considered one of the services that would increase the most because they have delays of more than 80%. While in November 2023 for a family group its value was $71,789, it would go to $168,154 pesos in March 2024.
In the month of March 2024, the fees of the private schools They will be updated with expected increases of between 70% and 100%, base increase. It is estimated that a fee would go from $56,721 to $145,143.
“As a summary, the inflationary escalation will occur due to all the correction and honesty of the prices of the country’s economy, among which we must include the exchange rate, public service rates, regulated prices, and even a lot of surplus pesos. ahead impacting on the price variation. In this way, a basket of services for a typical family that was $564,726 in November 2023 will increase to $1,297,400 in March 2024. An increase of 130% in less than 5 months,” explained Damián Di Pace, Director of Focus Market.
In that sense, he stressed that the mass consumption basket for that same family by 2024, at $420,000 including food, drinks, cleaning and personal care items. “That is to say that a typical middle class family would need $1,717,400 to sustain your standard of living and quality of services at the beginning of the third month of 2024,” he concluded.
Source: Ambito
