💸LA INFLACIÓN ESTANCADA EN LOS ÚLTIMOS CUATRO MESES: EN AGOSTO DIO 4,2%

Summary

The economic team in Argentina is facing challenges as inflation remains stagnant at around 4% for the last four months, contrary to expectations. The core inflation, which excludes regulated and seasonal price increases, has been consistently around 4%, posing questions about the effectiveness of economic policies. The discussion highlights concerns about the country's competitiveness, the need to reduce inflation to below 2%, and the delicate balance of increasing public service tariffs while maintaining fiscal health. Additionally, the political maneuvering around pension increases and the shift in votes among deputies is critiqued, suggesting a departure from the president's initial anti-establishment stance.

Takeaways

• 📈 The inflation rate in August was 4.2%, which is higher than expected and has been stagnant around 4% for the last four months.
• 🔍 Core inflation, which excludes regulated or seasonal price increases, has accelerated for the second consecutive month, reaching 4.1% in August.
• 🎯 The Ministry of Economy's target of keeping inflation below 2% is far from being met, raising concerns about the effectiveness of current economic policies.
• 🌐 The persistent inflation rate raises questions about the sustainability of the nominal anchor, which is the official exchange rate fixed at 2% monthly.
• 📉 Despite a strong recession, inflation has not dropped below 4%, challenging the government's ability to reduce inflation as the economy begins to recover.
• 💡 The government faces a dilemma in managing public service tariffs, which are currently very delayed and need to be increased while maintaining fiscal balance.
• 🏦 The Central Bank's projection for core inflation was 3.2% for July, but it actually stood at 3.8%, indicating a discrepancy between expectations and reality.
• 🗣️ The political debate within the legislative assembly highlighted a shift in votes, with five deputies from the Radical party changing their stance on pension increases.
• 👴 The government's handling of pension increases has been criticized as politically motivated, with accusations of using pensioners as a tool to influence votes.
• 🔄 The Central Bank's credibility is being questioned as it has not been able to bring down inflation as expected, leading to discussions about the future of economic stability.

Q & A

What was the inflation rate in Argentina for August as discussed in the transcript?

The inflation rate in Argentina for August was 4.2%, according to the data discussed in the transcript.

What is 'inflation núcleo,' and why is it significant?

'Inflation núcleo' refers to core inflation, which excludes regulated or seasonal price increases. It is significant because it reflects the underlying trend in inflation and has shown persistent acceleration, which is a concern for the government.

Why is the consistent inflation of around 4% concerning for Argentina's economic policy?

The consistent inflation rate of around 4% is concerning because it has persisted despite the government's efforts to reduce it. This situation is incompatible with other economic policies, like the official exchange rate, and threatens economic stability.

How has the Central Bank's inflation projections differed from actual results?

The Central Bank projected that inflation would fall closer to 3% in July, but actual core inflation was 3.8% in July and increased to 4.1% in August, indicating a growing disconnect between projections and reality.

What challenges does the Argentine government face in controlling inflation and exchange rates?

The government faces the challenge of balancing inflation control with maintaining the competitiveness of the official exchange rate. If inflation does not decrease below 2%, the economy risks losing competitiveness, making it harder to accumulate foreign currency reserves.

What economic impact could the recovery from the recent recession have on inflation?

As the economy recovers from the recession and consumption starts to increase, it may be harder to control inflation. The reduction in available stock and increasing demand could drive prices up further, complicating inflation control efforts.

How might delayed adjustments to public service tariffs affect Argentina's inflation rate?

Delays in adjusting public service tariffs, such as electricity and gas, have helped contain inflation somewhat. However, the need to raise tariffs to reduce subsidies in the future could contribute to further inflationary pressures.

What was the political outcome of the vote on the pension reform, as mentioned in the transcript?

In the vote on pension reform, the government succeeded in blocking the opposition's attempt to pass an increase in pensions by securing crucial votes from five radical deputies, who had initially supported the reform but later changed their position.

Why is the radical deputies' vote switch significant?

The vote switch by five radical deputies is significant because it allowed the government to block the pension reform and secure a political victory, despite potential backlash from the public for using political maneuvering to change the vote.

What is the public's perception of the political maneuvering around pension reform?

The public is generally frustrated with the political maneuvering, particularly regarding pension reform. There is a sense of disappointment that politicians are using such tactics at the expense of vulnerable populations, such as retirees, who are already struggling to make ends meet.