To maintain the purchasing power of March 2023pensioners and minimum wage retirees should receive a bonus of $170,000. And that bonus should be greater—than $236,000 –-to prevent them from losing purchasing power in the first 5 months of 2024 compared to the same period last year.
The calculation is Nadin Arganaraz, of the IARAF (Institute of Fiscal Analysis) based on the official increases of the last 12 months up to March this year.
In March 2023 the minimum asset was $58,665 plus a $15,000 bonus – a total of $73,665.
With inflation of 16% in February and 15% in March, year-on-year inflation would rise to 311%.
As a result, the March 2023 $73,665 would need to rise to $302,763 to maintain the same purchasing power. Since the new minimum asset will be $134,446, the bonus would need to amount to $168,317 to reach the total income received by this sector of retirees in March 2023.
On the other hand The March increase also affects the months of April and May. Therefore, assuming “inflation of 16% in February, 15% in March, 13% in April and 10% in May”, the IARAF Report indicates that “pensioners with the minimum can finish the first 5 months of year with the same purchasing power as in the same period of 2023. The answer is a $236,000 bonus to be given in March, April and May. With this bonus, given the expected inflation, pensioners would reach the month of May with purchasing power for the period equal to that they had in the first 5 months of 2023″.
Without the bonuses, the assets in a single year would have a loss of 44.5% compared to the same month of 2023. The fact is that from 58,665 dollars, the minimum pension will go to 134,446 dollars – an increase of 129.18% against a expected inflation of 311.58%. This is the loss of pensioners and pensioners with minimum income who did not receive any bonuses.
Meanwhile, first-quarter assets would themselves have a loss in purchasing power of approximately 43.4%. And the common goods of the first 5 months would have a loss of purchasing power of 44.8%, says the IARAF Report, which adds that “although a reform of the mobility law is necessary, which the National Congress should urgently define, in the transition, a greater loss of purchasing power of pensioners’ income should be avoided.”
The Report concludes by underlining that “in the next few days the value of the bonus granted by the government will be known. On one side of the coin there will be the impact on the purchasing power of pensions and on the other the impact on the real level of public spending on pensions. In January, a third of the year-on-year reduction in national primary public spending it was explained by the real decline in pension spending”.
Source: Clarin
