“You don’t know how he is Sergio…”. This is how the men close to the head of the Palace of Finance describe the mood of the Minister of Economy today, after the CPI of 6.6% in February, which fell like a Cold water bucket in the Pink House.
“The reality is that we want to be champions, but if we qualify for the Libertadores it’s not bad at all,” they say. They still have alive hope that March can change things for them.
Despite the fact that private estimates understand that with the influence of the seasonal increases (like schools, for example) there is no way that the number is satisfactory, in the Treasury they remember that these increases were framed in the “Fair Prices” agreement, with which they hope they are not excessive.
Minister Massa’s aspirations are compromised. “Imagine that with these numbers he can’t think of anything else… He’s convinced that next month it’s going to go down. If he gets a 5 ahead, sign. This was a blow.”
What will happen to the strategy to curb prices?
Neither Sergio Massa nor any of his advisors are considering changing something from what they think is a strategy that, although it takes time to achieve positive results, will achieve them sooner rather than later.. “If a game went badly for you, you have to assume it. But the game system is good and you have to win the next one,” they say in this regard.
One of the few people from the government who spoke up to this moment about the latest index was Gabriela Cerruti, the spokesperson for the Presidency, who expressed her concern, described the inflation data as “terrible” and recognized the problems in controlling the rise in prices that make people’s daily lives difficult. The other was Ignacio (Vasco) de Mendiguren, Secretary of Industry and part of the economic team, who said: “Inflation doesn’t go down in two days either.”
The sharp rise in prices in February, a blow to the government’s anti-inflation plan.
When Massa took office, in August 2022, the year-over-year inflation rate was 78.5%. However, currently that same index has increased to the worrying 102,5%. The numbers of the consumer price index (CPI) show that in August it was 7%, in September 6.2%, in October 6.4%, in November it decreased to 4.9%, but in December it increased at 5.1%. In January inflation was 6% and in February the index reached 6.6%.
At the beginning of the year, when the 60% salary guideline was considered, there was talk of a “higher rate than the devaluationdevaluation higher than the inflation and everything lower than the wages“, none of the three premises would be fulfilled at the moment.
For now, no close change is seen in the short term. The idea of the Treasury has been what it understands was the solution for Chile, Colombia e Israel: “If they could, why not us?”, they wonder.
Massa Plan against inflation: Economy maintains the bet
“There are no rabbits in the galley, economic policy is communicated with results,” says a source close to the Ministry of Finance. Over there, They bet on continuing on the path of deficit reduction, price freezes and agreed increases, hoping that they will eventually give positive results. As an incentive, the companies that contribute more products to the program will achieve fewer deadlines when it comes to obtaining dollars and importing inputs.
When trying an explanation of why the 6.6%, they assure that the carne, which was lagging far behind in value, made the big leap that pushed the number up. For those who find this argument insufficient, they add that the repeated power outages complicated the dairy production chain and there were shortages that were reflected in the gondolas and failed to supply the demand. As a consequence of this, their value rose.
The limited compliance of some products of the Fair Prices program due to non-delivery from their suppliers, also increased the demand on brands that are outside the agreement.
The rise in prices threatens the political aspirations of the current Minister of Economy.
In summary, the Ministry of Economy, despite being “in the doldrums”, continues to maintain its strategy beyond the poor economic results and is confident that they will eventually achieve their goals.
However, economic uncertainty remains high and the situation is expected to remain difficult in the short term.
What is certain for Sergio Massa is that something will have to go down: either inflation or his presidential aspirations for this year.