With the PASO already played and consumption lower than in other elections, the Government is already looking at November

Juan Manuel Barca

09/07/2021 21:47

• Clarín.com

• Economy

Updated 09/08/2021 8:10

A few days before PASO,

the Government accelerated the pace to heat up the economy by stimulating consumption

.

The measures include the increase to retirees expected by mobility, the announcement of a new increase in the minimum wage at the end of September and the Now 12 plan, along with zero-rate loans for monotributistas and 10-year lines to renovate homes.

The expectation is to reach the

November elections

with growing salaries and assets, low inflation and more vaccines,

but it will be at worse levels than the last midterm elections

due to the slow recovery, still high prices, poverty at historical peaks and depressed incomes, putting a ceiling on consumption amid the pandemic.

According to a report by Abeceb

,

GDP

will grow 7% year-on-year in the third quarter and probably 3% in the fourth quarter, but its level in the second half

will still be 3% lower than the recessive second half of 2019 and 9% lower than GDP. that was in the midterm elections of 2017

, when he won Together for Change.

In the case of

private consumption

, the difference is even more marked.

Still showing a rise of around 4 or 5% year-on-year, the consulting firm estimated that it

will be 19% below the second half of 2017 and 20% below the same period in 2013

, the legislative ones in which Sergio Massa prevailed in the province of Buenos Aires.

Although the Government maintains that "consumption is recovering", private and official data show a mixed scenario.

Sales of food, beverages and personal care, by case, fell 4% in August in proximity formats of up to 500 m2 and rose 2.5% in large stores

, according to preliminary data for August from

Focus Market

.

It is precisely in large stores that programs such as Care Prices and official controls have the greatest impact.

"

People want more predictability, they prefer to spend now and not wait, they advance their purchase even adjusting

because many people do not collect their income every month," said

Damián Di Pace

, director of the consultancy.

Despite the improvement in VAT collection, official attempts to reactivate consumption face an

unexpected stumbling block: the caps on credit cards

.

The banks' decision not to update them complicates the purchase of washing machines, TV, computers and cell phones, which are difficult to access without financing for an average salary of $ 39,504, according to the latest INDEC data.

Added to this, credit to the private sector had a nine-month monthly decline in relation to inflation.

"

Since January, real falls have been observed in consumer loans. Particularly in August it was 1.1% real monthly

,"

LCG

said

in a report, in which it linked it to the retraction of loans to the credit cards.

The reopening of joint ventures, on the other hand, would allow the real salary of the formal private sector to reach the third quarter with a slight year-on-year increase of 2%, but the levels will continue to be very low.

The purchasing power will be similar to the declining level of the recessive 2019, it will be almost 12% lower than that of the 2017 election and almost 13% lower than 2013

, according to Abeceb.

Revenues are impacted by inflation that in November will be slightly above 50% per year. "

Undoubtedly, a very different" salary "climate when voting in 2005 when the real salary grew 10% per year, or even with the 4.5% increase in 2009

(and even so in the Province of Buenos Aires, De Narváez beat Néstor Kirchner), "said the consultant. 

The other negative indicator is 

poverty, which will be around 40%, a level never recorded in legislative elections since 2000

. For the pxq consultancy of the former Vice Minister of Economy,

Emmanuel Álvarez Agis

, if the "photo" of pensions, wages, consumption and employment is observed, the ruling party will go to elections with

"the worst pocket" of the last five primary elections

.

The government is betting that the electorate will watch the "movie." This is a limited improvement in employment and income, with inflation of less than 3% per month. "

As of the second part of the year, the real salary begins to show improvement in the margin, but the annual average would fall again for the fourth consecutive year,

" estimated

Agostina Myronec

, an economist at

Ecolatina.

The consumer shock would slow down once the polls closed.

It is that after November, the Government will continue the negotiation of the debt with the IMF and several changes are expected.

"

After the elections, gasoline may rise and rates increase in the provinces

, the exchange and rate anchor will loosen," predicted 

Lorenzo Sigaut

, a partner at

Equilibra

.

Look also

In the week of PASO, the Government increases social spending, health and public works by $ 107,749 million

Buenos Aires rentals: August showed the highest increase in the last 12 years

The Chamber of Commerce demanded to free imports and more Now 12