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

A24com

11 Sept 202409:18

Summary

TLDRThe 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.

Outlines

00:00

📈 Economic Concerns Over Inflation and Fiscal Policy

The paragraph discusses the stagnation of inflation around 4% over the last four months, which is a concern for the economic team. The core inflation rate, which excludes regulated or seasonal price increases, has been consistently around 4%, far from the Ministry of Economy's target of below 2%. The script also mentions the Central Bank's projection of inflation nearing 3%, which has not materialized as inflation has remained stubbornly around 4%. This situation raises questions about the government's economic policy, particularly concerning the nominal anchor of the official dollar exchange rate and the need to maintain competitiveness and generate dollars. The discussion points to the difficulty of reducing inflation while also dealing with delayed public service tariffs, which are crucial for fiscal balance but could further impact inflation.

05:01

🗳️ Political Shifts and the Impact on Pension Policies

This paragraph highlights the political maneuvering around pension increases in Argentina. It details how the government managed to secure votes by swaying five deputies from the Radical party, who had previously supported pension increases but changed their stance. The discussion criticizes the use of political tactics that resemble those of the 'caste' the president promised to fight against. The narrative suggests that the president is becoming part of the very establishment he sought to change, using similar methods to influence votes. The paragraph also reflects on the broader implications of these political shifts for the country's economic stability and the trust of the public in the government's ability to address pension and economic issues effectively.

Mindmap

Keywords

💡Inflation

Inflation refers to the rate at which the general level of prices for goods and services is rising, and subsequently, the purchasing power of currency is falling. In the video, inflation is a central theme, with the script mentioning that the inflation rate in August was 4.2%, which is higher than expected by the economic team. The video discusses how inflation has been stagnant around 4% for the last four months, which is a concern for economic stability and policy-making.

💡Core Inflation

Core inflation is a measure of inflation that excludes the effects of volatile price components, such as food and energy prices, to provide a more accurate picture of underlying inflation trends. The script highlights that core inflation, which excludes regulated or seasonal price increases, accelerated for the second consecutive month to 4.1%, indicating that the underlying inflationary pressures are persistent and not in line with the economic ministry's target of being below 2%.

💡Economic Policy

Economic policy refers to the actions and strategies implemented by governments to influence economic variables such as inflation, unemployment, and economic growth. The video discusses the challenges faced by the economic team in managing inflation, which has remained stagnant despite economic recession. It questions the effectiveness of the current economic policies in addressing persistent inflation and the impact on competitiveness and foreign exchange.

💡Official Dollar

The official dollar rate is the exchange rate set by a country's government for the conversion of its currency to the US dollar. In the context of the video, the official dollar rate is mentioned as a nominal anchor that is inconsistent with the current inflation rate. The video raises concerns about the sustainability of the economic policy when the inflation rate is significantly higher than the monthly increase in the official dollar rate.

💡Recession

A recession is a period of negative economic growth that lasts for at least two consecutive quarters, typically characterized by a decline in GDP, high unemployment, and reduced industrial production. The script refers to a 'very strong recession' that the economy was in, questioning how the government will manage to reduce inflation consistently when the economy begins to recover and consumption starts to pick up.

💡Public Services Tariffs

Public services tariffs are the rates or prices charged by the government for services such as electricity, gas, and transportation. The video discusses the dilemma of how the government will manage to increase these tariffs, which are currently very delayed, while also needing to maintain fiscal surplus and reduce subsidies, all the while trying to control inflation.

💡Fiscal Surplus

A fiscal surplus occurs when a government's revenue exceeds its expenditure over a given period. The script mentions the need for the government to maintain a fiscal surplus next year, which implies that it must carefully manage its spending and revenue, including the timing and extent of public service tariff increases.

💡Subsidies

Subsidies are financial assistance provided by the government to support a specific industry, sector, or group. In the context of the video, subsidies are mentioned in relation to public service tariffs, suggesting that the government has been providing financial support to keep the cost of services like electricity and gas low, but it must now consider reducing these subsidies while managing inflation.

💡Central Bank

A central bank is the main financial authority of a country, responsible for monetary policy, regulation of the financial system, and maintaining the stability of the currency. The video mentions the Central Bank's projection for core inflation and how it has been consistently higher than expected, raising questions about the effectiveness of the Central Bank's policies in managing inflation.

💡Political Strategy

Political strategy refers to the methods and tactics used by political parties or leaders to achieve their goals, which may include influencing public opinion, winning elections, or passing legislation. The script discusses a political victory by the government in changing the votes of deputies from the Radical Party, which was crucial in blocking a proposal for pension increases. This highlights the use of political strategy in achieving legislative outcomes.

💡Pension Increase

A pension increase refers to a rise in the amount of money retirees receive as part of their pension benefits. In the video, the debate around pension increases is used as an example of political maneuvering and the impact of political strategies on public perception and policy outcomes. The script criticizes the use of pension issues for political gain, suggesting that it is an example of the government adopting the practices of the 'caste' it sought to combat.

Highlights

The inflation rate for August was 4.2%, exceeding the economic team's expectations.

Inflation has been stagnant around 4% for the last four months, raising concerns about economic recovery.

Core inflation, which excludes regulated and seasonal price increases, accelerated to 4.1%, marking a consecutive rise.

The economic ministry aimed for inflation to be below 2%, but the goal has not been met.

The Central Bank predicted inflation would fall to 3.2% in July, but the actual rate was 3.8%, followed by 4.1% in August.

Core inflation has shown resistance, staying around 4%, instead of decreasing as promised to foreign investors.

The inconsistency between inflation and the official dollar rate (set at 2% monthly) poses a risk to economic competitiveness.

Despite a strong recession, inflation did not fall below 4%, raising questions about its reduction in the future.

Public service tariffs remain underpriced, with upcoming increases likely to impact inflation further.

The government has delayed planned tariff hikes due to the persistent high inflation.

The Central Bank’s failure to bring down inflation over four months has hurt its credibility with investors.

The situation has become problematic for future dollar accumulation and overall economic stability.

The political debate intensified after five radical party deputies reversed their previous votes on pension increases.

These deputies were crucial in helping the government block a two-thirds vote for pension mobility reform.

The government's success in preventing the reform highlights its growing political maneuvering power, despite public discontent.