Supermarkets with prices rescheduled by hand and hastily, computer equipment stores working behind closed doors, only to deliver orders already paid for in previous days, home banking systems crashing in operations involving dollar accounts, car repair shops offering the same service triple the amount charged the previous week.
After Martín Guzmán announced his resignation from the Ministry of Economy last weekend, Argentines rushed to supermarkets and stores to stock up and experienced a week of uncontrolled prices, with readjustments of almost 20%.
The arm wrestling between President Alberto Fernández and his vice, Cristina Kirchner, exposed two visions of economic policy for Argentina. Fernández in favor of maintaining the debt restructuring with the IMF (International Monetary Fund) and the commitments that this implies, such as fiscal adjustment and inflation control. Cristina showing contempt for the entity and asking Alberto to “use the pen” to demand more taxes and adjustments from the richest companies in the country, and to return to the policy of monetary issuance triggered by the pandemic that, on the one hand, helped the poorest population. , today fuels Argentine inflation, which is already at 60% per year.
Guzmán had come into office with Cristina’s support, but when he began to criticize the subsidy policy and advocate an increase in electricity and gas bills, Kirchner turned against him. The criticism had been so harsh that he resigned while she was delivering a speech last Saturday.
Seen as a “middle ground” between the two visions, the inauguration of the successor, Silvina Batakis, did not bring calm to everyone. For the IMF, yes, as she has committed to fulfilling the agreement signed by her predecessor. The Argentine population reacted differently.
Accustomed to soaring prices, as in the hyperinflation of the 1980s or the post-corralito of 2001, Argentines rushed to get rid of their pesos. Those who can — and they are few — take refuge in the dollar. However, since the Macri administration it is only possible to buy US$ 200 per week in an official way. The option is to go for the parallel dollar, which has risen more than double the official one due to demand. While the US currency is sold at 125 pesos in the official currency, it reaches 280 pesos in the parallel. The market, in turn, fearing and watching the rise of the parallel, mark prices.
“The consequences are unpredictable. If we already had high monthly inflation (and annual inflation reaching 60%), it is not now that it will decrease. Before, we used to justify the recession, the war in Ukraine, but this problem is new and we invented themselves,” said Claudio Caprarulo, from Analytica.
The report had left a computer for repair last week, for a price of 60 thousand pesos (US$ 470 in the official, just over US$ 200 in the parallel). On the day agreed for delivery, the store was closed. The next day, however, 75,000 pesos were charged. The justification was that the price of parts in imports increased.
At another time, a driver told the report that he arrived late for the race because he needed to change a belt and was in the workshop, but ended up giving up the service “because it was going to be more than twice as much”. The rest of the way was hoping the old belt wouldn’t burst.
In times of currency insecurity like this, Argentines usually buy electronic goods and food wholesale, so they don’t get stuck. Even that wasn’t easy. Appliance stores also worked only partially on these days and with prices rescheduled by up to 20% – while July inflation, according to projections, will be 6%.
The government has announced a new version of the Care Prices program, with a list of about 1,300 items that cannot be increased. It’s the good old freeze, much criticized by economists. “It’s always the government’s first idea, and it never works, but we always use it, it involves putting the blame for the economy on the supermarket owners and not on those responsible for economic policy, of course it doesn’t work, it’s putting a band aid on someone who needs it. of a transplant”, says economist Fausto Spotorno.
In his first interview with a television channel aligned with Kirchnerism, Batakis said there will be a ban on buying air tickets abroad in installments, and urged people to focus more on domestic tourism to avoid the outflow of dollars.
