The vice president was clear in her public request to the Minister of Economy: “We need a more precise and effective intervention policy” why food companies“They have significantly increased their profit margins.”
Following a known path (with a core where companies are responsible for inflation), Cristina Kirchner asked to intervene to appease the increases that came into effect after the resignation of Martín Guzmán last July 3, which triggered a rise in free dollars, creating the conditions for Argentina’s entry a new inflationary regime.
Now monthly inflation is around 6/7% when at the beginning of the year it was 3/4%, that jump it seems irreversible short term.
The new inflationary regime took effect in the race for wages: last May 4th Cristina Kirchner congratulated sergio palazzo for getting a 60% raise for bankers. This week it was announced that bank employees will have a increase from 94%.
Banks will have increases of 14% in September, 10% in October, 10% in November and 9% in December, as well as a bonus of $ 185,500 and in December there would be a new revision.
An annual salary increase of 94% (post-conflict employees in the food industry rubber got 100%) displays the intensity of the race in order not to lose consumption capacity in an economy aimed at indexing as much as possible.
Hours before the complaint Serge Massathe Deputy Minister of Economy had told Congress that the “company gross margins” they were ahead of three years ago “, resulting in a coincidence with the vice president’s vision, but it didn’t last long.
Gabriel Rubinstein Far from holding businessmen accountable, he argued: “The fault of the exchange disorder, the very high gaps, the obligation to finance 180 days to import, the quotas, etc., etc., do not lie with the companies. It is our (government) responsibility that this improves“.
The deputy minister mentioned the “exchange disturbance” within hours of the end of the soybean dollar, which resulted in a 40% increase in the exchange rate for producers and exporters and brought more than $ 4,000 million closer to Central Bank reserves.
Now, the ability to liquidate soy at $ 200 and not $ 147 of the wholesale dollar is over. And now that ?. It will be tech dollar Or will the dollar for overseas tourism become more expensive or will a mining or oil dollar or lithium dollar appear?
The uncertainty is such that the versions have even grown (it is even said that they were launched by the same minister) that the Government would be prepare a stabilization plan now that the inflation expectation is generalized around 100% per annum.
It was also Rubinstein who played down the rumor by saying: “Unify the foreign exchange market, without a robust primary fiscal surplus and almost without reservationsIt seems too risky. The north (3 years?) Should be that “.
An argument in favor of the government that does not think about a stabilization plan based on a jump in the exchange rate is given by the decision to propose once again “double” bonus. (the one that makes the most of inflation or the change in the official dollar) which in practice act as exchange insurance. But nothing is guaranteed in this matter.
in the report “the four traps of high inflation”, the consultancy firm ABECEB assumes the existence of four “instability traps”: the one generated by the 600,000 million dollars issued to pay the soybean dollar; raising the interest rate to try to get people to stay in pesos and not go to the dollar; the discretion of stocks to authorize imports and – very relevant – the use of high inflation such as “a tool” for the adjustment of public spending retired, AUH, etc.
The report highlights one of the palpable consequences of high inflation: the needs of a family nearly $ 120,000 for not being poor.
And he concludes: “This increases the likelihood that distribution conflicts will lead Cristin to veto e to disavow the adaptation of Massa. The trap? To be credible, Massa must regulate spending and inflation it’s functional for that. But more inflation increases the likelihood of a political veto and, therefore, less credibility on the sustainability of the adjustment policies ”. Once again the dog bites its own tail.
Source: Clarin
