A good measure of things, it is known, is to compare them with others of the same species or a similar species.
The 13.2% that February inflation raised is the
great number
that Javier Milei proclaims if it is measured against the 25.5% in December or the 20.6 in January and thus, with a lot of wind in its favor, it goes through a
deceleration
of the inflationary process.
But the 13.2% that the President praises as an effect of the “formidable work” of Minister
Luis Caputo
is no longer a large number, but the large and very large number that it really is and is verified in INDEC's own forms.
It is noted there that in the 85-month series that starts from January 2017, only two periods exceed 13.2%: precisely, December 2023 and January 2024. That is,
there are 82 lower ones.
From the same saga, we have that Argentine inflation in February
more than triples
the 3.9% annual rate of Brazil and surpasses the 1.2% monthly rate set by Venezuela and 2.5% in Bolivia.
In the midst of a mess accumulated for years, we remain the
only country in the region that exceeds 200% annually
, with 276%, which is 174 percentage points higher than the index from a year ago.
Just like an ultra-voracious Pacman,
in three jumps the INDEC indicator ate 60% of the exchange rate adjustment that Milei spent in his debut
.
Between December and February it rose 71% against a 118% increase in the official exchange rate, causing a flash that is still alive regarding a system of freed and unregulated prices.
It was a preview of the full-steam mega adjustment that aims to usher in
the era of permanent fiscal surplus
and, continually, deflate the weight of the economic State and the political State.
Much of this operation, in which the objective of turning
around power relations is nested,
appears in the debate over Milei's DNU and the so-called Omnibus Law;
rather, in the contents and implications of both.
In tandem with the chainsaw,
the inflationary blender
functional to the Government's plan has already shaken a 38% real blow to public spending in the first two months of 2024 compared to the same period in 2023. To make it better understood, the kick represents nothing less than 5.5 trillion pesos or, if you prefer,
US$ 6,460 million at the official exchange rate.
The largest in 30 years
What some analysts call “savings” means
the largest cut for a two-month period in the last 30 years
, according to data from Iaraf, an institute specialized in the analysis of public accounts.
Predictable, well known, the shock was right on retirements and pensions appealing to a formula that Kirchnerism managed to establish and that, in fact, is a half-hearted indexation and to the extent of the adjustments.
Put in silver, it was a blow of 1.9 billion pesos on the income of some 7 million people who do not exactly live in the best of worlds.
And what remedy would there be for a loss that amounts to a large third of the assets?
There would be another classic of these times: a $70,000 bond that obviously does not cover the hole left by January inflation, much less the delay accumulated for years.
There is more of the same in the formula that the Government announced to replace the current one: that after an increase of 12.5% in April, starting in May pensions will now follow the inflation set by the INDEC.
Very clear:
the service that supports a large part of the fiscal surplus of the first two months is not touched,
that is, “little hair for the old lady.”
And so he does it his way, the fact is that pressured by the opposition and above all by a problem that burns and can no longer resist any more dribbles,
Milei had to accept the cost of being the one who changes retirement mobility K.
By decree and ahead of time to the sanction of a law that promised great success in Congress.
Back to the mower of the January-February two-month period, after the pension spending, the $748,000 million that went to public investment continue, that is, a drop of 82% compared to the same two-month period of 2023 that seems to anticipate
the end of the present State in basic and absent productive and social infrastructure works.
It should be assumed that the Government will look for alternative sources, because if there is something for which the country pays dearly, it is precisely this structural deficit.
By the way, a fact that is also a yellow light: in Latin America public investment averages around 3.9% of GDP and in Argentina it has not reached 2% since 2017, that is, it is half or less than half of what exists in countries comparable to ours, if not lagging behind ours.
With $632,000 million in energy subsidies and $385,000 million in salary expenditure, the fiscal savings of the first two months scale to 3.6 trillion in just 4 chapters of the National Budget that, measured in silver, represent 66% of the total.
More than half of the 66% come from retirements and pensions.
The conclusion at the end of this table is that
the inflation blender alone is not enough and that there are some items that do not allow for further adjustments
.
Worse, if you will, is that inflation increasingly looks like too dangerous a partner.
There is a middle number hidden among a sea of numbers from a consulting firm that speaks precisely about these risks: it says a 12% increase in the cost of food in March.
Perhaps it seems acceptable compared to some recent antecedents, except for one detail: with 12%, food will accumulate above 50% in the first quarter, which no longer seems so acceptable coming from where we come from.
Where we come from and where we are going, it would be worth adding if we look at the table of rate increases included in the report of another consulting firm.
In gas, 230% appear in April and 40% in May.
For electricity, 115% in May.
In April we have 209% in water and 359% in underground.
There is a 160% discount for buses in the Metropolitan Area but still without a defined date.
The first conclusion that emerges from such a barrage predicts continuous double-digit months and puts in parentheses the 8.5%, or the blessed digit, that the institutes consulted by the Central Bank predict for June.
What follows is, in reality, a decision that is being cooked in the Ministry of Economy and aims to
deal a serious blow to inflation and the inertia that feeds it without brakes.
The problem is that stopping inflation was the first of all, an iron objective, in the libertarian plans.
And the fiscal shock, the formula that would allow us to achieve the objective.
Today we have the effects of the adjustment and inflation alive and well.