This Thursday, the official coalition will have a decisive meeting to order the internal one for the elections. The prices, the big problem
By Gustavo Marangoni
02/15/2023 – 8:05 p.m.
On Tuesday, March 15 of last year, the president Alberto Fernandez declared: “Next Friday the war against inflation begins.” One year later, there are no doubts: on this battlefront the Government has been registering successive defeats.
with the index of 6% registered in January and the year-on-year running at 98.8%, there is no discussion possible. The enemy army has been punishing hard and evenly the elite commandos of careful, frozen, monitored and fair prices that the Secretary of Commerce has sent in successive waves in the last twelve months.
It has also defeated cross subsidies and exchange or tax stimuli. It is a tough rival who is indifferent to the messages of peace and the good intentions proclaimed by officials and businessmen.
So far, the tandem Massa-Rubinstein After deploying its forces and with a lot of fireworks, it managed to lower the inflationary dynamics registered in the third quarter of last year, when it averaged 6.8%, just one notch. For eleven months, the CPI has remained above 5%, which leaves the promise of next April at 3% as very voluntaristic.
Prices add pressure in the Front of All
To the multiple economic problems that the situation generates, we must also add the political stress on a stressed pro-government coalition. If “the table of the Argentines” suffers the effects of goods and services that increase without pause, the “political table of the Frente de Todos”, summoned to design an electoral strategy, also sees its costs increase.
Any design to face the STEP and then the general ones requires a truce from prices. With annual inflation in triple digits, the aspirations of the different pre-candidates suffer, unionists have less margin to accompany and governors who suffer from the decrease in discretionary resources and public works managed from the Casa Rosada are also complicated.
Massa took the lead in the battle against inflation and his promises are becoming difficult to keep.
Those who point out that the high inflation floor It is the result of the triple combination of the Macrista heritage, the pandemic and the war. But going through the fourth year of management and in a regional and global context of falling prices, those reasons are weakening. Within the framework of an electoral competition, more results and fewer explanations are required. And assume the malpractice contributed since December 2019translated into the explicit resignation from the beginning of a consistent and coordinated plan between the Treasury and the BCRA.
“To the multiple economic problems that the situation generates, there is also political stress on a tense government coalition”
Inflation, between faith and realism
As a note of color, we can mention the paradox that the number provided by INDEC was disclosed on Valentine’s Day. Almost a perfect metaphor for a toxic relationship between politics and inflation that has been going on for decades and requires the leadership to propose decisively and with a firm voice “we have to talk.” Of course, no one expects this to happen before December 10 of this year. For the coming months, we will have to read the cards anxiously, betting only that the situation does not spiral and, in the best of cases, it is somewhat below the 94.8% of last year.
Wait for it to come true promised in the national budget (60%) requires a lot of faith and little realism.
The oppositionFor his part, he does not currently have the obligation to explain specific measures, but the issue fuels divisions between the orthodox friends of the shock and the gradualist moderates.. For some members of Juntos por el Cambio, the “learning” from Cambiemos’ failure on the matter was not having been hard and fast enough in the adjustment, while for others self-criticism goes through not having been practical enough.
January showed a resurgence of inflation that generates alarm.
At the end of the dark tunnel of inflation is the fiscal and quasi-fiscal question and the diagnoses do not lead to the same treatments. In general, both in the ruling party and in the opposition, no one disputes the need to achieve budget balance, but they do differ in timing and manner.
Inflation is undoubtedly one of the most political issues to be faced by the next administration. For the moment, we will have to continue cutting nails. February does not bring, so far, good news in terms of prices. The gimmicky tricks fade quickly while it is the employees who must resort more frequently to magic to resist hard attacks on the pocket.
