That, at first glance, but it must also be mentioned that many of the laws covered by the DNU imply changes aimed at deregulation of some markets and it is clear, at least on a superficial reading, that, Since there are no regulations, there would be free competition and prices would tend to rise initially, although the final objective is for them to go down. However, as Bisang clarifies, “this can happen, but it is not necessarily true and, to a large extent, it depends on each sector.”
The liberation of prices, the biggest blow to the pocket
In the same sense, the Isaac Rudnick, director of the Institute for Social, Economic and Citizen Policy Research (ISEPCI), warns that “the main immediate negative impact on the pockets of workers is through the liberation of priceswith the consequences that we are already experiencing: Milei inaugurates his mandate with an inflation that is around 40% for food in his first month.
It is worth mentioning that The price liberalization that Rudnick mentions refers mainly to the repeal of the Gondola Law, which has a strong impact on food. Economist Elena Alonso agrees with this view by pointing out that “what has the greatest impact on the pockets of the Omnibus Law and the DNU is the elimination of the Gondolas and Supply Law, which goes towards a price fluctuation mechanism due to supply and demand and not because of a limitation on maximum prices.”
And, as Bisang points out, “along each production chain, There are different actors with different degrees of concentration and capacity to impose conditions and in the markets there are frictions and asymmetric information.” In this sense, it warns that the effects of the measures are complex and can affect prices in different ways, which makes it difficult a priori to establish the general effect of the measures on the pockets of Argentines, but an initial overview can be obtained. .
End of retirement mobility, a concern
Likewise, Alonso mentions as a very important element in the impact on pockets the elimination of retirement mobility. “The mobility rule is removed and it is established that the increases, from now on, will be set by the Executive Branch without going through Congress,” summarizes the analyst.
And regarding this point, the economist and director of the Center for Argentine Political Economy (CEPA), Hernán Letcher, states that “the suspension of retirement mobility, with a government that determined a reduction in the participation of retirements within the Gross Domestic Product (GDP) makes it clear that making this decision was a step towards the adjustment of retirees”.
Bye, Creole barrel: fuel rise
On the other hand, Letcher points out that we cannot fail to include in the list of measures that affect our pocketbooks the regulation that forces YPF to sell fuel at international prices. “Already The Creole barrel does not exist and YPF stops being a witness in the market in setting prices”, warns the analyst.
Thus, as has been seen in recent weeks, there is no doubt that there will be a strong rise in fuel prices for consumers, which will undoubtedly have a direct effect on the home economy, but also indirectly, due to the transfer to transport and energy prices that these increases will have.
Increase in rates and transportation, direct impact on the wallet
On the other hand, Alonso mentions the increase in rates, that impacts directly on the pocket. And, within this package, mention the public transport also as “a key element because it will generate a decrease in our purchasing power”.
Privatizations also hit the pocketbook
Likewise, he points out that the privatizations They are a key element to take into account, although it may seem like a very distant relationship. But is not. In this sense, the economist explains that “we have to look at it case by case, but the truth is that, for example, with regard to Banco Nación, many people have an account in that entity and it is expected that, when it is privatized, it would leave.” towards a worsening of conditions for clients, or if you want, a sincerity.”
The obvious: the repeal of the rental law
But the repeal of the Rental Law also has a very strong impact on the pockets of Argentines. Let us remember that, with the formal entry into force of the DNU Renting in accordance with the legislation in Argentina becomes very different. He Decree of Necessity and Urgency 70/2023 proposes changes that apply to all home rental contracts entered into after December 22, 2023 and grants greater autonomy and flexibility to the contracting parties, but they may also generate uncertainty about their consequences.
Some elements are the fact that the parties can freely agree on the adjustment of the value of the rentals using any index, public or private, in the same currency of the contract. This eliminates the obligation to use the Lease Contract Index (ICL) or the Casa Propia index. Freedom is granted to determine how often the contract will be updated, eliminating the previous semiannual minimum. And contracts can be made in pesos or foreign currency and the tenant cannot ask to make payment in a currency other than the agreed upon one.
Deregulation of drug prices
And it is impossible not to mention the changes in the pharmaceutical regimen. Since drug prices were deregulated and the agreements that governed them to control their value to the public ended. That triggered increases of up to 138% or more since November and the situation raises obvious concerns about access to essential treatments for various health problems. In fact, pharmacies have noticed a notable decrease in demand.
Freeing imports also has repercussions
On the other hand, the liberation of imports is another element to take into account, according to Rudnick. And he warns that this measure “will surely have a negative impact on the national economy, especially in the textile industry.” This, without a doubt, will be reflected in salaries and employment, as a consequence of the possible closure of companies and lower sales of national products. And it should also have some effect on prices, although it is not yet clear what that will be.
Source: Ambito
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