In the latest inflation data for March, which showed a 7.7% increase, the item that pushed the price indicator the most, other than Education due to a seasonal problem, was food and beverages, which recorded an average increase of 9.3% and stood above general inflation, up 106.6%, according to INDEC.
By then, consumers were adjusting to the spiraling price escalation that is shocking to compare as much as the only higher denomination bill that continues to circulate to this day: the $1,000 bill has ceased to bear fruit.
According to the “changómetro” that measures the Agricultural Foundation for Development of Argentina (FADA), the food and drink basket costs 12 times more than it did seven years ago. “To make the same purchase of food and drinks that cost $1,000 in December 2017, today you need to pay $12,650. “This is 12 times what it cost,” that foundation’s analysts explain.
Measured in terms of the increase in other goods, “the same clothes and shoes we bought for $1,000 seven years ago now cost us $13,676. That is 13 times more expensive,” they explain.
The calculation is made on the evolution of the universe of prices measured by INDEC and takes into account the population’s loss of purchasing power. “Today we would need a $13,000 bill to have the same purchasing power. With which, the $2,000 bill that is about to go into circulation is already overdue,” says David Miazzo, an economist at FADA.
According to the analyst, “the problem is not the prices but the pesos,” he says. “The problem is not that prices go up but that the currency loses value. In other words, it takes more pesos to buy the same products and the same dollar.”
According to the analyst, this difference poses an error in the diagnosis of inflation: “if I believe that the problem is prices, I apply the price control police or freezes, etc. So, we see that the measure has not reached”.
“Until the devaluation of the peso is stopped, through monetary (to stop issuing pesos), fiscal and trustworthy policy, that loss of value of the currency will be maintained. Furthermore, in an economy that does not grow, Wages are unlikely to exceed inflation.” From December 2017 to the same month in 2022, the average decline in purchasing power was 23%.
What happens in Argentina with food prices is different from reality in the rest of the world. While in our country prices rise almost daily, in the world the food price index in the last 12 months, according to the FAO, has fallen by more than 20%, manifesting itself mainly in cereals, oils, dairy products and meat.
Source: Clarin
