Moments after it became known that INDEC had announced a 13.2% price increase in February, Luis Caputo He assured it on Monday Inflation will be in single digits in the middle of the year and entrepreneurs are asked for “responsibility”while defending the opening of food imports, a measure he considers a “push” to reduce prices.
The Economy Minister considered the results of his first 90 days in office a “positive surprise”. According to their numbers, the fiscal and quasi-financial deficit has shrunk by 10 points of GDP, the expanded monetary base has contracted by more than 40%, the Central Bank has purchased more than $9 billion in reserves, and the bonus for importers (Bopreal) cushioned demand. of pesos.
When asked whether monthly inflation will fall to single digits in the middle of the year, he was optimistic: “Yes, if you look, even taking March inflation into account, if you eliminate the braking effect of what was the recomposition of relative prices to separate what inflation is, I mean transportation, prepaid bills and so on, we are already in that figure“.
Caputo provided these definitions at the U.S. Chamber of Commerce’s annual summit (AmCham 2024), where he held food manufacturers and supermarkets accountable for current inflation rates, which remain at elevated levels. “The index does not fully reflect the decline in inflation and both manufacturers and chains recognize this,” he said.
In a context in which the CPI accumulated a 71% increase between December and February, the minister insisted in front of 200 executives that “the majority, if not all entrepreneurs, set prices (embedding prices) on their goods imagining a maximum stress situation, a $2,000 dollar, $2,800, some taking as a reference the future Rofex dollar, and the reality is that that didn’t happen.”
Caputo claimed that many products “were obsolete in dollars” and as a result they resorted to “the famous promotions”. “We are not even asking for a reduction, but rather that prices more or less reflect the price at which they are sold. If we sell 2×1 or 80% discount on the second unit, it means the first one can be sold much cheaper,” he said.
The president of AmCham, Facundo Gómez Minujín, also consulted him regarding the unblocking of imports of some products in the basic basket announced on Tuesday, to which the official commented that during the meetings held with consumer goods companies and supermarkets, the CEOs acknowledged that they had set excessive prices.
“They know their products are obsolete and their response was ‘we’ll lower them.’ Now, well, in the meantime there are prices that really, and some are based on the core basket, that honestly can’t be there,” he said . And she mentioned that they eliminated fair pricing, supply law and gondola law, but “things cost 50% more than in the United States.”
In this framework, he argued that the measure aims to give marketing chains the power to negotiate with producers and “defend the consumer.” “This is a push for them to start lowering prices,” he said, referring to the initiative’s releases payments for bananas, potatoes, pork, coffee, tuna, cocoa products, insecticides, shampoo, diapers , among other products.
Asked aboutdollarisation, the official argued in favor of currency competition to lower inflation through a “shock” and rejected a tapering program “like Peru, over 3 years”. “People will have no tolerance, currency competition will bring down inflation,” he said.
However, he acknowledged that doing so requires purchasing more reserves or assistance from the IMF. And he assured that the organization is “open” to evaluate a new program and “if it was reasonable, to give even a little more money”, something which has not yet been confirmed by the IMF authorities.
On the other hand, the minister reiterated that it is important to “remove” the titles, but without taking risks. “It could be removed, but we will wait for the right time,” he assured. In another part of the speech, he said that it is “very important” that the laws blocked in Congress are approved, he criticized governors who still “don’t understand” and assured that his team is working on tax reform, without give details.
Source: Clarin
