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ENGLISH VERSION
What price votes?
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VERSIÓN ESPAÑOL
Los precios de la victoria
Si el INDEC registró una inflación del 5,8% en lo que va del año y si los supermercados la semana pasada se comprometieron a reducir los prcios en un cinco por ciento, podría deducirse lógicamente que el jefe de Gabinete Alberto Fernández tenía razón cuando dijo que la inflación “no existe” en la Argentina. Pero al menos una encuesta muestra que el 96% de la población duda de si los acuerdos de precios a los que se llegó con los supermercados tendrán algún efecto contra la inflación y, por supuesto, la gente está en lo cierto. ¿Qué sería más fácil para los supermercados que subir los precios en un 15 a 20% y luego recortar el aumento en un cinco por ciento y presentarlo como un gran triunfo del gobierno?
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If INDEC statistics bureau has registered 5.8 percent inflation so far this year and if the supermarkets last week agreed to roll back their prices five percent, then it may be logically inferred that Cabinet Chief Alberto Fernández was right when he said that inflation “does not exist” in Argentina. But at least one opinion poll shows 96 percent of the population doubting whether the price restraint agreements reached with the supermarkets will have any effect against inflation and, of course, the people are right. What could be easier for supermarkets than to jack up prices 15-20 percent and then trim the increase by five percent with the reduction presented as a great government triumph?
In seeking to tame inflation via such pseudo-data as the INDEC figures or these price reductions, the government shows no sign of looking beyond the symptoms to fight the fever because any serious action clashes with the headlong consumer-led growth which is their main claim to success in these elections. So little does President Néstor Kirchner understand this that the price agreements with the supermarkets were accompanied on the same day by his call for lower interest rates — nor is a single voice raised in favour of currency appreciation even though the current exchange effectively imports inflation. While the headlines in the pro-government press as to wage increases having trebled inflation this year should be viewed with skepticism (since the base of this calculation is inflation as measured by INDEC) and while income policy cannot be considered extravagantly generous when a minimum wage of 900 pesos is confronted with a family shopping-basket of 3,000 pesos and when 30 percent of the population lives below the poverty line, there can be no doubt that wage earnings have risen substantially this year (even if some sectors and trade unions benefit far more than others) — otherwise, nobody could ever have charged 18 pesos for a kilo of tomatoes. In seeking to hold down prices while speeding up the economy as a whole, Kirchner has thrown relative prices out of whack without ultimately succeeding in halting inflation.
Perhaps the most worrying aspect of last week’s agreement with the supermarkets is its electoral timing. While one optimistic scenario might view inflation as the byproduct of an election year which could be reversed once the frantic public spending of electioneering ends, is it not also possible that these price reduction announcements are merely to placate the voter and that once the ruling party is returned to power, anything goes?
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