On the last day of June the minister of Economy and Finance, lily arbeleche, arrived at Parliament with several boxes. Inside them were a bunch of papers containing the project of Accountability.
In one of the notebooks are written the projections that the government does on the evolution of different indicators of the economy, among them, inflation for 2023, 2024 and 2025.
Why do these numbers matter for the tenth round of salaries that is beginning in the private sector and that involves 660,000 workers in the private sector?
Because once again the scheme of guidelines suggested by the Executive Power for the negotiation between employers and workers it is based on nominal adjustments for expected inflation.
landfall
In the Accountability, the economic team placed a projection of inflation of 6.7% by 2023. What does it mean?
According to the proposed scheme, the next salary adjustment, once the new agreements have been negotiated, it would have a floor of 2.8% (semester projected inflation).
When would it be charged? That correction is retroactive to July 1 and should take effect in August. Although it usually takes several weeks, because you have to wait for the renewal of the agreements to be negotiated at each of the tables. There are usually sectors that agree quickly and others that take longer.
Adjustments in 2024 and 2025
The initial scheme takes as a reference the signing of agreements for a two-year term (between July 2023 and June 2025) with adjustment every six months.
In this way, in 2024 it would be necessary to make two salary adjustments. Since projected inflation for that year is 5.8%, the guideline proposes two salary corrections, of 2.9% in January, and of the same magnitude in July.
For 2025, expected inflation is also 5.8%. In January of that year, the fourth and last adjustment would correspond, which stands at 2.9%, which is the inflation projected for that semester.
The official formula also includes the payment of inflation corrections (difference between actual and projected inflation for the period) which, if necessary, will be activated in July 2024, and in July 2025 at the end of the agreements.
What about recovery?
To the adjustments for inflation already detailed, we must add the total recovery of the salary lost during the pandemic (bridge round), and that the government proposes to be paid in three installments.
For sectors of activity where the recovery of the pending real salary is less than 2%, it is suggested that it be carried out in three equal and consecutive semi-annual installments, beginning in July 2023.
In that case the base formula for July would be: 2.8% adjustment (for future inflation) plus a third of the pending recovery.
And in sectors where the pending salary recovery is greater than 2%, the same payment modality is proposed, but starting in January 2024.
It is worth mentioning that the guideline given by the Executive Branch is only a floor for negotiation. Employers and workers are free to deviate from it if they agree to do so.
Hence, later variations may arise in the increase percentages, the periodicity of the corrections and even the speed of recovery of the outstanding salary, for example.
