'The war against inflation' celebrates one year with runaway prices

Almost a year ago, at an event in Tortuguitas, President Alberto Fernández spoke of the start of the war in Ukraine and expressed his concern about the impact on the cost of food.

."

Since then, the interannual cost of living has gone from 52.3% to 102%, that is, almost double, despite the expansion and multiplication of controls in factories and gondolas.

The battle to curb prices in these 12 months, according to the presidential war metaphor, is headed for defeat.

It is a period crossed

(Martín Guzmán, Silvina Batakis and Sergio Massa) and

(Roberto Feletti, Guillermo Hang, Martín Pollera and Matías Tombolini).

And also by the head of the Central Bank, an entity whose primary role is to defend the value of the peso.

All the statistics record the inflationary acceleration despite the tightening of the regulated price programs.

For example,

, that is, 7 months and 11 days.

Average monthly inflation for the period, according to the consulting firm LCG, was 4.4%.

But since

In his place, Hang took office, who lasted just 44 days in office, with 5.2% monthly inflation.

In Pollera's short-lived management (27 days), the cost of living rose to 7.4%, although it seems unfair to blame him for all the responsibility.

Tombolini replaced him with a greater share of power, since by instruction from Massa, he also came to control Foreign Trade, the office in charge of authorizing or stopping imports.

This Sunday,

He has been in charge of the Secretary of Commerce for 7 months and 10 days, an office with an enormous symbolic charge for the toughest Kirchnerism. In that period, monthly inflation averaged 5.9%, well above his efforts to establish reference prices

, which covers more than 50,000 products in agreements with companies from 17 different sectors.

This contemplates a cap of 3.2% per month on increases against the delivery of dollars from reserves (the cheapest on the market) to pay for imports.

Although Tombolini repeats that inflation is combated by lowering the fiscal deficit and accumulating reserves,

(with fines and closures) to verify alleged non-compliance.

“

(94.8% year-on-year) and the beginning of 2023 shows signs of acceleration”, they say in Ecolatina.

Not only that.

The same report from the consultancy highlights that since the entry into force of the expanded version of Fair Prices (November last year), the gap in basic product prices between the modern channel (hyper and supermarkets) and local stores (self-service , warehouses) deepened, which hit the lower-income sectors particularly hard.

," they stressed.

“If the objectives of the Fair Prices program are analyzed (lowering the rate of remarks and cutting inflationary inertia),

”, interprets Guido Lorenzo, director of the LCG consultancy.

Jorge Vasconcelos, an economist at Ieral, currently led by Carlos Melconian, was appeasing: “In an economy so closed by stocks,

.

The bulk of inflation is a fiscal and monetary issue, ”he opined.

Vasconcelos recalls that in 2021 (with the economy practically normalized after the pandemic), direct financing from the Central to the Treasury represented 3.7 of GDP.

"Although later that can be sterilized with bonds,

(excess pesos), which inevitably impacts inflationary expectations," the economist explained.

Ecolatina Chief Economist Santiago Romero Manoukian broadly agrees.

He says that price controls isolated from a stabilization program are insufficient to combat inflation.

“This is a macroeconomic problem and

,” he pointed out.

Even more: "Commerce can only contribute to the stabilization task, but the main responsibility lies with the Central Bank," he pointed out.

Many specialists are struck by the fact that the head of the monetary entity, Miguel Pesce, hardly talks about the subject when INDEC, every month, publishes the official inflation data.

"It is very striking that he does not make statements, beyond interest rates," comments Lorenzo and adds that recharging the efforts in the "war against inflation" on the

. "

The fight to stop the rise in prices requires an increasingly scarce fuel: fresh dollars.

"Inflation is a macroeconomic problem and its reduction cannot be based on price agreements: consistent exchange, monetary, fiscal and income policies are needed," explains Claudio Caprarulo, from the Analytica consultancy, adding that "going to war

”.

A similar opinion is expressed by the economist from the consultancy Equilibra Lorena Giorgio.

“With enough dollars, I think the Fair Prices program would have worked,” she says, alluding to the program reformatted by Tombolini shortly after taking office.

“At the end of the year -Giorgio points out- Massa seemed to have stabilized the economy when he began to release foreign currency from soybean dollars.

The idea was to coordinate price expectations, parity a little lower and align indexed contracts.

But the meat just skyrocketed and on top of that the drought ended up aggravating the situation”.

The lack of rain implies that

, at least, an unavoidable fact for the Central Bank.

The fall in reserves in June 2022, comments Romero Manoukian, was one of the two big shocks that had an impact on the inflationary escalation.

It happened weeks before Guzmán's resignation.

The other flash occurred in February of last year, with the start of the Russian invasion of Ukraine, which impacted food and energy prices.

This Tuesday (one day before the anniversary of the "war against inflation"), the INDEC will release the inflation data for February.

January climbed to 6% and private consultants estimate that percentage as a floor, to the torment of the population.

Price distortion deepens

The expansion and reformulation of the main anti-inflationary program (Fair Prices) deepened the distortions in the mass consumption market.

, as it contains essential consumer products, including food, beverages, toiletries, and cleaning supplies.

Almost all the statistics show that the price gap between the so-called modern channel (hypermarkets and supermarket chains) and the so-called traditional channel (supermarkets, warehouses and neighborhood fairs) has widened in the last year, despite the constant efforts of the government to avoid it.

“Since the entry into force of Fair Prices,

: for example, in the traditional channel the water grew 10% above the modern channel;

noodles, 9%;

milk, 7%;

and yogurts, 6%”, indicates a report by the consultancy Ecolatina.

This differential in the increases in Fair Price products "implies a more severe impact on the most vulnerable sectors," says the same consultant, since "only 15% of the poorest buy in large chains."

Price regulation also has a very clear impact on the different marketing channels, although promotions and the variety of payment methods also have an influence.

In January, according to Ecolatina,

."

Due to having better prices, an invaluable attraction in the midst of escalating inflation, the large chains managed to increase

.

"This is the highest level of the last 10 years," graphed a qualified source from the supermarket.

However, the same source clarified that "in the 90s the sector concentrated 50% of the mass consumption sector".

Fair Prices is a new reformulation of the program with which it tries to contain inflation.

As soon as he took office, in August of last year, the current Secretary of Commerce, Matías Tombolini, agreed with manufacturers and chains to freeze prices for 120 days for a basket of 1,900 basic products.

And a guideline of 4% monthly increases was established for the entire remaining universe.

Subsequently, it relaunched the program by adding 17 different items (among them textile yarns, slippers, cell phones, meat, fruits and vegetables, industrial inputs and even motorcycles), which

.

This was agreed with some 600 companies.

In spite of everything, the inflationary escalation did not stop.

In November, the cost of living fell to 4.9% and in December it rose a little: 5.1%. The data for January (6%) upset the Government and next Tuesday, one day before the first anniversary of "the war against inflation”,

“In August of last year, the arrival of Massa and Tombolini brought strong signals of fiscal adjustment and interest rate increases.

The result was progressive, it was possible to reach 6% again between September and October, and 5% in November and December”, explains Claudio Caprarulo, from Analytica.

But he adds that "

."

He thus alluded to the lack of effectiveness of the price controls that the Government has been applying.

However, “

.

There are seasonality issues in the lower inflation in the sector but in any case the fall is more pronounced than in other years”, highlighted the economist.

Another fundamental aspect is the level of supply of products. Supermarkets warn that manufacturers deliver only 45% of the products they request.

It is not a minor fact.

, depending on the area of ​​the branch.

look too

City: due to the sharp rise in food prices, inflation among the poorest soared in February to 9.29%

look too

Fair Prices: fines apply to 10 companies for lack of merchandise