The withdrawal of the articles on pension mobility from the megaproject anticipates that in March retirees, pensioners and beneficiaries of social benefits would have
a loss of around 36% in purchasing power
compared to December.
And then, starting in April “if there are no changes in the law or exceptional measures such as new bonuses or extraordinary increases, the fate of retirees will depend on what happens with inflation: if the rise in prices slows, the rate will slowly increase. purchasing power of those benefits.
Otherwise, they will continue in the current situation, of deterioration,” explained Rafael Rofman, researcher at CIPPEC (Center for the Implementation of Public Policies for Equity and Growth).
The deterioration of 36% is because inflation in December was 25.5% and a price increase of 23/25% is projected in January and another 20% in February.
Thus,
the accumulated increase from December-January-February would be 88.3%
and in December the increase in salaries was
20.87%
.
Consequently, retirements and pensions will have a deterioration of almost 36% with the aggravating factor that
the lowest salaries no longer receive the VAT refund
of up to $18,800.
In March, retirements and pensions will receive the increase according to the current mobility formula.
It is estimated that it could be around 30% versus inflation in the first quarter of the year that could be around 80%.
This sharp deterioration adds to that of recent years.
At December 2023 values, according to IARAF (Argentine Institute of Fiscal Analysis) “given that the average monthly inflation of the last 6 years was 5%,
real retirements recorded losses throughout the period
.”
If the percentages of lost assets are added between 2018 and 2023, it appears that without bonuses they would be equivalent to 13.7 minimum assets in 2017 (114.2% annually for 12 months) and
with bonuses equivalent to 9.4 minimum assets in 2017 ”.
In 2023, with the inflationary jump in December, retirees and pensioners had a loss of between 14.2% - in the case of those who received the bonus for minimum salaries - and 32.3% for medium salaries and more high.
In this way, between September 2017 and December 2023, the average retirement deterioration is 40%, with a drop in minimum salaries of 30%
and of medium and higher salaries of 55%
.
Rofman explains that the law in force since 2021 “has
two serious problems
: it uses variables that are very procyclical - they improve quickly when the economy is good, but fall quickly when there are problems - and that it has a strong lag: the increases granted each quarter depend on "whatever happened with salaries and collection between 15 and 3 months before."
And he adds: "Although we still do not have all the data to calculate it, it is expected that the increase in March will not only not compensate for this, but will
deepen the fall,
which would reach close to 50% compared to December 2019. As of There, if there are no changes in the law or exceptional measures such as new bonuses or extraordinary increases, the fate of retirees will depend on what happens with inflation: if the average increase in prices decreases, their purchasing power will slowly increase, if not, “They will continue in the current situation.”
NE