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Reality speaks for itself

Reality speaks for itself

A little more than two months after the La Libertad Avanza government took office, it is clear that the adjustment is falling on the majority of the population. The aforementioned change in relative prices is leading to the income of workers and retirees being increasingly behind the prices of the main goods and services in the basic basket.

As in December 2023, the CPI for January 2024 (+20.6% monthly) was presented by the ruling party as good data since it fell from 25.5% the previous month. However, when inflation was around 12% monthly, at the end of the previous administration (mainly a product of the devaluation imposed by the IMF) there was talk of a model “impoverishing” who was driving “inexorably to hyperinflation.”

Let us also remember the criticism received by the previous government’s programs, which aimed to counteract the effects of these increases: subsidized credits for retirees and registered workers, tax relief for monotributistas or price containment programs.

The adjustment can already be felt in several sectors of the economy. Examples of this are the cut in subsidies to public services and the consequent abrupt increase in rates, the release of tariffs for prepaid medicine, private schools, fuel, or the increase in the value of food (+20 .4% monthly in January).

A phrase from Javier Milei could sum up much of the government’s approach: “The chainsaw and the blender, which are pillars of adjustment, are not negotiated.”

In this framework, several items from the 2023 Budget were frozen in 2024, a drastic cut, given the year-on-year inflation of 254.2% in January, and some funds were directly eliminated, as happened with the “National Teacher Incentive Fund” which allowed complementing and improving the salaries of teachers throughout the national territory. This salary bonus was in force from 1998 until January 2024, but the national government did not renew the decree that extended its validity.

In another recent statement, the President pointed out that “it is the first time that the adjustment falls mainly on politics and the first time in 100 years that Argentina is doing what was truly successful in the world.”

Regarding who bears the weight of the adjustment, the latest data on salary levels published by INDEC is eloquent: the income of registered workers (in the public and private sectors) fell last December by a real 13% compared to the previous month.

Regarding the comparison with the world, the reflection of Cristina Fernández de Kirchner In the document published last week it is eloquent: “We are in a multipolar world with a strong trade dispute between the two largest economies in the world and the resurgence of nationalism and economic protectionism”. Very far from the market freedom and non-state intervention that Milei advocates. In turn, the countries of the European Union have the possibility of having up to 3% fiscal deficit and thus apply different public policies.

The Government has decided that inflation will be responsible for making the adjustment, while it defunds the provinces, governs without a budget and by decree.

It is becoming more and more evident that the policies that this Government is applying harm the majority of Argentines. The Executive Branch has the legitimacy of the votes obtained, but that must also be reflected in compliance with what was expressed in the campaign and above all within the framework of respect for the Constitution. “We are going to make the political caste pay for the adjustment,” Milei proclaimed during the campaign, trying to convince the electorate that they would not be harmed. Reality is responsible for proving the opposite.

Source: Ambito

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