06/10/2021 6:01 AM
Updated 06/10/2021 6:01 AM
Until a few months ago, the scenario with which the Government was excited predicted that inflation would end the year in a range close to 29%, with wages increasing above 30%, which would allow
purchasing power to grow between 3 and 4 points
, after three consecutive years of falling consumption.
Three months before the primary elections,
of this premise
the first batch of the parity elections was accommodated on the 30% scale in various installments, with revision clauses according to the evolution of prices.
Between January and May, inflation already amounts to 22% and promises to exhaust between July and August the guideline that Martín Guzmán set for all of 2021.
pushed up the parity
, with some unions already closing above 40%, such as employees of Congress.
With these coordinates, the chances of reaching the new date of the PASO elections - September
with consumption on the rise and purchasing power being reconstituted are diluted.
From the consulting firm Invecq, Esteban Domecq estimates that 2021 will close with
a new loss in purchasing power of between 3 and 4%.
"This year, consumption is recovering from the fall in the second quarter of last year, when we were in full quarantine, but which is
still well below the level of 2019,
" says Domecq.
A sample button is that in the CAME survey, retail sales are 25% below the 2019 level and in shopping malls they show drops of 30%.
"As of May we have year-on-year inflation of 48% against wages that increased 35% in that period. It is a significant drop in wages and
that is what is weakening the recovery of the economy,
" says Domecq.
We do not see any reactivation of consumption in the short term,
" says María Castiglioni, director of C&T Consultores.
High inflation and the lack of creation of new jobs are the two elements that play against.
“Employment has not remotely returned to the level it had before the pandemic.
There are people increasingly dependent on state aid and this means that their consumption capacity is limited ”.
The role of incentives
Although the dollar's quietness is expected to take effect and inflation will begin to slow down, the recovery in consumption “will depend on there being some
, some specific policy.
Still I don't see that there is room on the supply side to rebuild wages.
Inflation is not going to slow down enough for the parity companies to end up winning;
we expect a fall of between 3 and 4% in real wages ”, details Domecq.
In the pessimistic scenario, where inflation climbs well beyond 50%, "purchasing power
could fall 7 or 8 points
“I don't see a chance that average wages will beat inflation for the year.
Surely there will be a
reopening of joint ventures
, but it will not be enough to compensate for inflation ”, indicates Castiglioni.
With inflation taking precedence once more, “
we are now on our way to the fourth year of declining purchasing power.
And the news is not good for next year, because the economy is going to grow very little.
Our base scenario is that after the elections the dollar is going to accelerate and in the following months there will be some tariff recomposition.
Several factors will push prices up, but the economic downturn could help inflation in 2022 not be far from 40% ", summarizes Castiglioni.
From Abeceb, Soledad Pérez Duhalde remarks that this year "there may be
some rise in real wages
if inflation moderates a little."
Analysts agree that the fate of consumption will be tied to the Government granting
in the run-up to the elections
for the most undermined sectors, such as retirees or holders of the Universal Child Allowance (AUH).
"These are the sectors with the greatest propensity to consume. It is not expected that there will be something massive like the IFE, but something more focused such as a bond or an offer of subsidized credits," says Pérez Duhalde.
Along these lines, the economist sees consumption at
where purchases of dollarized durable goods could be favored among the upper strata with the rest of the goods growing less.
For a part of the middle class, the Government already provides a
: the 1.2 million workers and retirees that this year will stop paying Earnings will collect the reimbursement in installments for what they paid more for this tax between January and May.
The first of these quotas would be received in July and the last in November, which would give more air to the consumption of these segments.
Due to anxiety and despair, the "psychological discomfort" of Argentines grew and is at the highest level in 10 years
The risk of a tense tie for the post-election economy