– From a liter to a drop –
The evolution of the prices of some products is dizzying: a liter of milk has increased 320% since the end of 2019, cooking oil 456%, and a kilo of sugar 490%maintains the specialized consultancy Abeceb.
“You stand in front of the gondolas (ndlr: supermarket shelves) and you analyze the prices as if you were choosing a jewel… The bakery is nonsense. I almost no longer eat grated cheese, which has gone through the roof, almost 3,500 pesos (about 20 dollars) per kilo, when a year ago it did not reach 1,000 pesos,” less than a third of the current price, explains Julián Rattano, a 66-year-old retired chemist, shopping at a supermarket in Parque Chacabuco, a middle-class neighborhood in Buenos Aires.
Roxana Prado, 34, laments: “The price of milk, cheese, eggs, nothing is related to nothing. I bought the maple (30 eggs) last year for 150 or 200 pesos (one dollar at the official exchange rate); today it is 700 pesos (3.88 dollars)”.
Mother of two children, ages 6 and 9, will not be able to go on vacation this year. “My husband and I work, but just thinking about the start of school and the expenses of March we are already shaking.”
– Multicausal and reflex turn –
For a decade, Argentina has registered annual inflation rates in two figures, but the price escalation suffered a strong acceleration since 2018, the year in which it reached 47.6%. Then there were 53.8% in 2019, with a drop to 36.1% in the midst of the pandemic in 2020, to grow again in 2021 (50.9%) and this year (94.8%).
The causes of inflation are multiple and their importance varies.
Over the years, expansionary policies based on fiscal deficits were mixed, financed in part by monetary issue; a classic inflation by demand, and strong devaluations that affected prices. Recently, external factors such as the war in Ukraine have added pressure, putting pressure on domestic energy and food prices.
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In Argentina inflation “it also has very important sociological roots”, economist Ricardo Aronskind told AFP. “Inertial inflation (ndlr: related to inflation expectations) is added,” said this professor from the universities of General Sarmiento and Buenos Aires.
“From a certain level of inflation, society begins to incorporate into its behavior patterns a systematic action of remarking prices, rates, salaries, rents (…) according to expectations that are not always solid, sometimes simply fantasies or rumors about what future inflation will be,” he said.
In this framework, some highly concentrated sectors of the economy, a minority, can play with prices and “make high profits”, but “wage earners and informal workers are systematically left behind by inflation,” he emphasized.
– Summer: hangover or breather? –
Three consecutive months of relative moderation in inflation (6.3% in October, 4.9% in November and 5.1% in December), a summer with crowded beaches, and an echo that still resonates with the joy of obtaining of the soccer World Cup, brought some calm to the Argentines, after a stormy month of July with two changes of economy ministers and inflation that reached 7.4% per month.
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The Minister of Economy, Sergio Massa said his goal is for the monthly inflation rate to “start at 3” in April.
Massa, at the head of a ‘super-ministry’ of the Economy of which the International Monetary Fund celebrated its “actions that are beginning to bear fruit”, is confident of growth “above 5%” by 2022 (the forecast was 4.5 % YoY in October). And, in an election year, he hopes to be able to “fight against inflation and order spending without cooling the economy or proposing painful adjustments.”
among other toolsMassa intends to extend until July a program of “Fair Prices” that freezes prices of 2,000 basic products and sets a ceiling of 4% increase to another 30,000, through an agreement with a hundred large companies.
