Food: the story of imported inflation is finally over

The inflation is, however you look at it, a uncontrolled, fast and indomitable monster for this version of Kirchnerism. The government had not recovered from the 7% that marked the cost of living in August Wednesday when, behind the scenes, it jumped 8.2% in the wholesale price index and 8.9% in materials. from construction.

7% brought the accumulated inflation in the first eight months of 2022 to 56.4%, which is equivalent to saying 24 percentage points above the record recorded in the same period of 2021 and 37 above 18.9% in 2020. : so it is, the figure is about three times that of just three years ago.

Now, the turn of the wholesale index. Given the correlation with the retailer, 8.2% already paints a bad sign of how the September cost of living is coming. It is itself the highest number since September 2019, i.e. in the last 35 months and marks 73.9% compared to August 2021.

Finally, 8.9% in building materials puts the accumulated figure for the first eight months at 56.3% and 20 points above 2021. Then, since the new K era began, the one that is now associated with investment in bricks and before your home has become no less than 300% more expensive.

It remains to be said that August compared to August the cost of materials has risen by 76.8% to immediately reach the conclusion that it is necessary to put the chips at 70 or some variant of 70. It is that together with that 76.8% of the construction, we have 78.5% annual cost of living and 73.9% wholesale prices.

To look to the horizon, the three are well on their way to capping a long 90% or straight 100% by the end of the year. With very slight differences, the result will double the shared brands in 2021.

It is worth clarifying, if necessary, that the incessant price increase is far from a game and also that the exercise of linking it with the imported inflation, to relativize or get rid of some of the things that happen here, it is gone. In principle, because the FAO curve that fueled the ruling party’s intense discussion reversed, and reversed several months ago.

This is exactly what the average food price index prepared by that United Nations organization counts. Accumulated in August five months of consecutive victims and even though it is still higher than a year ago, it falls by 14% compared to March, a lot by international standards.

It is a statistic composed of sub-indices that measure the prices that have, within them, basic products that abound in Argentina’s gondolas. They range from butter, cheese and milk; from beef, pork and chicken to sunflower and soy oil, wheat and corn derivatives and sugar.

Reflecting improvements in production, inventories and declining demand, among other changes, the FAO numbers for August reveal that the price of sugar it regressed to its lowest level since July 2021. Furthermore, the meat worth less than May and the dairy products compared to March and, moreover, that the cost of oils is the lowest in more than a year.

Obviously, nothing like that happens in the Argentina. The opposite happens and in dimensions that can only be assimilated to those that can be found in Zimbabwe, Sudan, Lebanon, Syria and Venezuelathat is, those that exist in the countries that lead the world ranking of inflation.

The latest INDEC indicator says it the cost of food increased 58.8% between January and August, a period equal to that used by the United Nations and therefore comparable to that. It indicates 44% for meat and exactly 60 or 60 for dairy products, sugar, oils, breads and cereals.

Nor do neighborhood data accompany the already tried and tested truculent discourse on the impact of imported inflation. Not even minimally and, again, as regards the cost of food and drinks in the first eight months of the year.

Against the INDEC’s 58.8%, Brazil’s statistics say 10.4%; that of Uruguay, 9.5%; 18% that of Chile and a little further away Colombia marks 9.1%. It is a question, therefore, of goods that here cost three to ten times more than in countries of the region formally comparable to ours.

One dimension of the internal problem suggests that with costs similar to those the basic food basket is assembled, which determines the number of poor people, that is, those people or families whose income does not cover, say, subsistence needs. That universe is part of a larger and more varied universe that defines the poverty line.

On the basis of data from the second half of 2021, INDEC has calculated the number of people “in a situation of poverty” at 10.8 million, of which 2.4 million “in a situation of poverty”.

Given the saber blows affecting inflation, it is obvious that the nearly 11 million that Kirchnerism rightly defines vulnerable will be many more when, at the end of September, the updated statistics based on the numbers of the first half of 2022 are known. in other words, what we are seeing, a huge loss of income where it hurts the most.

Of the things that are starting to be seen, LCG consulting provides one that fits easily into that displaced world. Signals that the food basket is fully updated once a month; that is, prices run non-stop.

Of course, not all of them grow in the same proportion, as the statistics of the last twelve months show. There we see 116% in clothing, 100 in prepaid and 85 for cars together with 41% in electricity and gas tariffs, 38 in telephony and Internet and 43 in mineral and carbonated waters.

Behind these imbalances lies what is called deadweight inflation, understood as the one in which delayed prices tend to catch up with advanced ones. If you want, a race in which many run for doubts or for fear of being trapped by one of the obstacles that the government usually imposes.

And since we’re at this dance, what’s left Axel Kicillof’s famous care prices of the second presidency of Cristina Kirchner? They have been reduced to little less than nothing in themselves, to some signs lost in the gondolas and to 4.45%, not even 5%, of the prices revealed by the Indec.

Something similar happened with the impetuous militant inspectors of La Cámpora and the official mayors who went to check, or check for the public, the merchant voters of their communes. Finally, there is no more effective fiscal adjustment than inflationonly it also attracts votes like few things.

From this patch coven comes the push that the Central Bank has just centered on the interest rates it pays to Leliq: it has brought them to 75%, or 23 percentage points above 52% at the end of July. Those letters, which the BCRA uses to sterilize the pesos it emits on pasture, already amount to as much as 6.8 billion pesos, or 5 billion more than at the end of last year.

All very expensive, all state and finally all price, 94% of the national Treasury debt securities are indexed to inflation or the official dollar: zero or more or less zero risk at the operator’s choice. There we have 7 billion pesos that expire in 2023, the year of the presidential elections.

End with a recommendation from the North American treasure to the Argentine government: “Implement the reforms to rebuild credibility, stabilize the markets and lay the foundations for sustained growth “.

It was about Sergio Massa’s visit to the United States and if someone judges him polite, have them read the slogans from their opposites: for example, mistrust due to credibility or exchange rate pressure where he talks about stabilizing the markets.