In annual terms, the inflation rate is 88% per year, the interest rate is 75% per year, and the devaluation rate is 57.3% per year. There is still a lag from the previous months where the interest rate and the devaluation rate ran behind the inflation rate.
Di Stéfano considers that the Government has proposed to companies that they freeze the prices of approximately 2,000 products and that they commit to increasing prices of nearly 30,000 products at a rate of 4% per month. The counterpart for these companies would be free access to dollars to import. The commitment has not yet been signed by the companies since the possibility of accessing import dollars is not explicitly included in the agreement.
It would give the impression that fair prices have a written agreement that is unfair, since it does not satisfy the parties involved. However, we would like to make some considerations. Every price agreement has historically been a failure, so the first thing we have to say is that it is highly probable that it cannot be met, or that the objectives set will not be achieved at the end of the 120 days.
To reach 120 days, all the economic variables should be aligned, or at least the interest rate and the devaluation rate of the peso. If you sign a price agreement to increase a universe of products by only 4.0%, we cannot have an interest rate of 6.25% per month or a devaluation rate of 6.7% per month. The government should help by lowering the interest rate and slowing down the devaluation of the official dollar, estimated the financial analyst.
In the event that the government cannot lower the interest rate to levels of 4.0% per month, it should give companies some tax benefit so that they can benefit from adhering to the program of Fair Pricessomething that, a priori, does not happen.
The agreement is stillborn, since prices are always set in the market, and never by the hand of a bureaucrat.
conclusion
The price agreement, which was presented between the government and the companies, was not signed by the parties involved and is not in force. What is happening is that the possibility of limiting price increases has led many companies to bring forward the updating of price lists, which currently do not exist, since the prices in the market are communicated verbally, and nobody wants to write an offer, because the prices vary in a matter of days.
A price agreement where the increases are located above the current interest rate and the devaluation rate is stillborn, and it is difficult for the program to go through the 120 days without setbacks.
If the program went through 120 days without problems, they would accumulate a delay in prices that on day 121 would produce a spring effect that would raise prices significantly and generate more problems than the ones it came to solve.
Source: Ambito
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