Argentine politics twitch at the pace of inflation

A clothing store announces its closure on a central street in Buenos Aires, in November 2022.Pablo E. Piovano (Bloomberg)

It is not an easy job to tame the Argentine economy.

Always on the edge of the precipice, one false step is enough for everything to explode into the air.

Mauricio Macri suffered it and now Alberto Fernández suffers it.

The first lost the elections in 2019 due to inflation.

Fernández is going the same way.

In both cases, they put together emergency plans to get to the polls alive.

Macri, with orthodox recipes, delivered the country with a 53.8% rise in the CPI, the worst data since 1991. Fernández, with heterodox formulas, has taken it to 104%, according to the latest official data released on Friday.

The feeling of crisis ending again embitters the spirit of the Argentines.

There are six months to go before the elections and Peronism sees how the electoral victory slips out of their hands.

The history of the fight against inflation is not on the side of the Casa Rosada.

On March 1, 2018, Macri proclaimed to Congress that the crisis he had inherited from Kirchnerism was over.

“The worst is over,” he said.

Two months later, the peso lost 9% of its value in a single day, inflation skyrocketed and Argentina asked for help from the International Monetary Fund (IMF).

Macri then outlined an explanation that is still joked about today.

“Things happened,” he said.

The president was thinking about the appreciation of the dollar, the rise in interest rates in the US and the price of oil.

In another month of March, but in 2022, Fernández thought it appropriate to declare the start of "the war against inflation."

The year-on-year accumulated CPI was then above 55%, but with a clear maturity horizon after an agreement with the IMF, he thought that everything would be easier.

A year later, inflation is in triple digits.

Fernández did not say “things happened”, but he blamed the crisis on the war in Ukraine and, more here in time, on the record drought that devastated the Argentine countryside this year.

Appeals to external causes, however, are exhausted.

On Saturday, with the Government still groggy due to the 7.7% increase registered in March, the Chief of Ministers, Agustín Rossi, opened up in an interview.

“We thought we were getting there, but we weren't,” he said.

The CPI had started a downward curve in October, but in December it went up again and did not stop.

The bitter task of taming the beast is in the hands of Sergio Massa, the economy minister.

Paradoxes of fate, Peronism has put its fate in the hands of the IMF and the United States, its historical rivals.

The challenge for the Casa Rosada is to avoid a sudden devaluation that leads to hyperinflation.

It is no longer a question of improving expectations to win the elections, but of surviving until December, when Fernández's term ends.

Massa was in Washington last week and brought some fresh air.

The Fund opened to "recalibrate" the refinancing agreement signed in January 2022 to adapt it to the new Argentine needs.

The drought, the worst in 60 years, will mean a reduction of 20,000 million dollars in export earnings this year.

After agreeing last month to lower the reserve accumulation goals, now it will be seen whether it is also necessary to loosen the knot of the reduction of fiscal red, agreed at 1.9% of GDP for 2023, and the monetary issue.

The crisis, in any case,

The 2001 crisis gave birth to Kirchnerism, a current of the Peronist left that soon joined the South American progressive trail.

The effect of this one in 2023 goes in the opposite direction: Argentines are fed up with politics and are increasingly looking towards the extreme right.

There is Javier Milei, an economist who declares himself an anarcho-capitalist and promises to blow up everything to put an end to "the political caste."

To lower inflation, he proposes to dollarize the economy and close the Central Bank.

The irruption of Milei marks the end of two decades of hegemony of the two great coalitions that emerged from the corralito debacle: that of Together for Change, created by Macri, and the Peronist Frente de Todos.

The polls now divide the cake in three, with between 20 and 25% of the votes for each sector.

Milei fishes in troubled river.

The polls place the undecided at around 30%, evidence of the detachment that this new economic crisis, the umpteenth, causes among the electorate.

The phenomenon also coincides with a process of succession of political leadership that, at the end of the day, complicates any possible solution.

Macri announced in March that he will not be running for president in October.

The empty chair accelerated the dispute for power between the mayor of Buenos Aires, Horacio Rodríguez Larreta, and Macri's former Security Minister, Patricia Bullrich.

On the sidewalk across the street, Cristina Kirchner got out of the race in December, after being convicted and disqualified for life in a corruption case.

Peronism has no candidate, while Fernández delays as long as possible the definition of a possible re-election.

For the Government, in any case, the scenario cannot be worse.

It is the law in Argentina that when the real salary of workers falls, those in power lose it.

According to the latest official measurement, the current average income is below that of the end of 2021, when Peronism lost the midterm elections, and it is already the worst in the last decade.

It is, in any case, to avoid a catastrophe at the polls.

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