The economy is made up of numbers but the data must be seasoned with a narrative, because Otherwise reality comes back like a straight punch to the jaw.. Supermarket sales fell 13.8% in January. In shopping centres, 21.3%. In February, imports were 18.6% lower than the same period last year. Taking December-March into consideration and assuming that inflation this month is around 12% according to estimates by Jorge Vasconcelos, economist at the Ieral-Mediterranean Foundation, Prices will have accumulated a 92% increase in four months.
All this for what? or until when? Today’s numbers alone are overwhelming.
Milei gave a hint a month ago when he said the worst would be in March and April. Judging by the data one could say that that moment has arrived. But there are concerns that make one wonder whether they are lacking put the bottom to.
It is clear that the path taken by the Government was the one that the candidates of Insieme per il Cambiamento and UxP would also have followed, regardless of the nuances and forms. Economists who voted for Sergio Massa admit today in public and private that Milei’s measures such as maintaining fiscal balance, eliminating monetary financing from the Treasury, correcting the official exchange rate and public service rates , the reorientation of the program with the IMF and not the elimination of its own shares as Mauricio Macri did in 2015, They were decisions of a correct diagnosis.
John Keynes said that in economics there is something that cannot be avoided: consequences. Perhaps the government will begin to realize and see that the impact of the opening of prices regulated by Kirchnerism, basically dollars and tariffs, can undermine the president’s image. if all it does is liquefy income. According to the government confidence index of the Di Tella University, Milei has a higher level than Alberto and Cristina Kirchner in the first two months. Even when?
The President not only delayed the gas increase, but has now resigned himself to changing the retirement formula by decree, when a couple of days ago he said that this instrument would not be an option and that he preferred the process to Congress . But since the recession and inflation are so serious, the loss that pensioners would suffer would further aggravate the liquefaction that their incomes have already suffered in recent months and which has led to the pension spending today is at its lowest level in 15 years: 40% of the tax adjustment to date has been made by pensioners, suffering the loss of their purchasing power.
Pension formula today updates salaries due to inflation with a three months late and for the collection of ANSeS, which will suffer in a context of declining activity. The government thus tries to lose less.
So is the worst over for them? “It’s a relief for pensioners”the consultancy Empiria says in a report.
The Government must now recover what it has lost by relegating the use of the blender to adjust pensions (0.5% of GDP) and see if it resorts more to the use of the chainsaw in other sectors: fewer subsidies or change the income tax and tax higher income sectors more. In that case, both the rates and the tax would be two blows against the segments of the population who voted Milei. In that case they will realize that only then will the worst have arrived. Like a blow to the jaw.
Source: Clarin
