The ticket increase effective from this Wednesday on AMBA transport will not be the first nor the last. The decision to adjust it for inflation means that every month there will be increases. A 6% monthly increase was applied in March. And if inflation stays at that level for the rest of the year, the service could soar to 148% in 2023.
This is a much higher increase than the general inflation forecast by the private sector for the full year -97.7%- and the 100% change recorded in February. Until now, transportation has functioned as one of the “anchors” to trample on regulated prices. But this year the Government has decided to update the rates and index them, after having done the same with prepaid cards.
A 38% hike (without adjusting for inflation) was implemented in January, taking the minimum bus fare from $25.2 to $35 and the train fare from $17.25 to $22. And this Wednesday, mirroring the January CPI, they jumped to $37.1 and $23.3. If the index shows similar increases through the end of the year, as expected, the ticket would be $62.6 and $39.3, a 148 and 128% increase over 2023.
The government has proposed an inflationary guideline of 60% this year, but for that, inflation should be brought down to 3.6% per month from March to the end of the year. A very difficult goal to achieve, bearing in mind that this month there is also the adjustment of other regulated items such as the subway fare, gas, prepaid, rent and fuel.
“There is a gap between free prices and those that only increase when the Government allows it. Compared to the end of 2019, core inflation has accumulated 331% while regulated products have increased by 218%, almost 100% less. So the question of how to start to disarm this problem that has been generated,” said Matías de Luca, economist at LCG.
Given the transport weighting in the GBA CPI, the impact of a service increase of 6% per month would be 0.2% per month in the core CPI. “It must be taken into account that the real tariff for the transport service is extremely backward and has been further backward in the last three years,” warned Matías Sturt, economist at Invecq.
According to Sturt’s calculations, the bus ticket delay in AMBA is greater than it existed in December 2015. “Actually, freezing or delaying tariffs is inflationary because it drives up subsidies, increases the deficit and increases the money problem. Currently spending on transport subsidies is about 0.6% of GDP,” he said. ‘analyst.
The unknown is what the impact will be on inflation and income, which is also lagging behind. For De Luca, the adjustment of transport “adds another factor of pressure to the inertia of inflation, which is one of the main challenges”. “To give a magnitude, absolutely all food items increase in a month. The frequency of adjustment is high and this feeds the inflationary memory, making the disinflation task more difficult,” he added.
Source: Clarin
