Argentina's Macri announces price truce until October elections

[sandensea]

Facing en economic crisis, mounting inflation and unlikely re-election prospects, Argentine President Mauricio Macri announced a package of economic measures including a freeze on utility rates, a voluntary price truce, and new credit line for senior citizens.

The centerpiece of today's measures - the price truce - covers 60 basic items, mainly food. Sixteen retail chains, with 2,500 stores between them, have signed on to the agreement.

Other measures include additional lending for housing and small business - reeling under central bank rates of 67% - and a new credit line for the nation's 8 million retirees.

Buenos Aires Mayor Horacio Rodríguez Larreta, who belongs to Macri's right-wing PRO, joined the measure by suspending a 2-peso (10%) increase in subway fares planned for May 2.

Subway fares had already been raised 153% from the same time a year ago, from 7.50 to 19 pesos (44 cents).

Gentlemen's agreement

The six-month agreement comes into effect on April 22 - until the October 27 general elections, which polls show Macri would lose by up to 22 points, depending on the opponent.

The truce, on a voluntary basis, was described by Economy Minister Nicolás Dujovne as a "gentlemen's agreement." Food prices, however, have reportedly jumped by an average of 10% in advance of the truce, first rumored a week ago.

Utility rate hikes, likewise suspended until the elections, have already reached an average of 3000% since Macri took office in late 2015.

The price truce recalls a similar - but more far-reaching - "Price Care" program launched in 2013 by Macri's populist predecessor, former President Cristina Kirchner to help slow what was then 25% inflation.

Kirchner's Price Care measure largely failed, and was described by Macri during his 2015 campaign as "something that won't be needed in our administration."

Falling bicycle

Macri's "Economic and Social Program" comes a day after Argentina's INDEC statistical agency announced that monthly inflation in March had risen to 4.7% - and 54.7% from the same time last year.

Inflation has risen steadily, from 25%, since the collapse a year ago of a carry-trade debt bubble known as the "financial bicycle" triggered a sharp devaluation from 20 pesos in April 2018, to 40 by the end of August.

While a record, $56 billion IMF bailout has since contained the devaluation (the dollar has hovered around 43 pesos since February), pressure on prices has persisted.

Consumer prices have tripled since Macri took office, with real wages down 18%. GDP was down 6.2% in the 4th quarter, with 263,000 jobs lost as of January.

That's equivalent to 2 million job losses in the U.S.

At: https://translate.google.com/translate?hl=en&sl=es&tl=en&u=https%3A%2F%2Fwww.pagina12.com.ar%2F188048-las-medidas-de-macri-para-la-crisis

Argentina's Macri beams at the child of a working-class family whose home he visited to "discuss" today's announcement.

The voluntary price truce is set to expire in six months - just as Argentines go to the polls.

Observers noted that the family, who had already appeared in a 2018 Macri spot, lived in a smaller apartment today than they did during their last "chat" with the president just a year ago.

[Judi Lynn]

1. Wow. Utilities exploded to 3000%, while the purchasing power of incomes is shrinking steadily.

The little girl's face reveals so much. She might not understand his feverish gibberish, but she DOES spot a liar when she sees one, she is "reading" him perfectly.

Same family from an earlier commercial he used it for in the past, only it has since been downscaled, moved to a smaller home. That's classic, isn't it?

Macri is demolishing the economy, the lives of human beings. I don't understand aiming the end of the current price truce at election time. Couldn't an incoming president immediately put certain parts of his sabotage of the economy completely out of service? it never takes a conservative new president any time at all to get to work tearing things up, after all, just as he did, himself. Why couldn't a sane, humane President start healing the country immediately, him/herself?

This is going to be a very interesting year, isn't it? Thank you for the updated information, sandensea.

[sandensea]

2. Macri's hoping that the price truce will slow inflation just enough for him to win

But of course, and as you pointed out, their economic problems are by no means limited to just high inflation.

Voluntary price restraints - which are likely to be abandoned by retailers within a month or two anyway - won't mean much. There's the deep recession to consider as well, and all the business failures and job losses that have come with it.

A real 'Macrisis' - one which, if he understood how bad it's gotten, he wouldn't even consider running for re-election.

His coalition, in fact, is trying to convince him to step aside; but his pride won't allow it - least of all for a woman (Governor María 'Opus Dei' Vidal).

The junior partners in the 'Let's Change' coalition (the centrist UCR), in fact, are this close to leaving the coalition, and either fielding their own candidate or endorsing Roberto Lavagna (Néstor Kirchner's former Economy Minister, and in many ways the architect of Argentina's stunning recovery between 2002 and 2007).

Of course though, Macri could just decide to cheat - and goodness knows he's considered it, by way of electronic voting.

He failed to implement it nationwide, you'll recall; but there's also electronic tabulation - which played a nefarious role in the 2017 midterms already.

So as you can see - and like here in the U.S. - a lot can still happen between now and the elections.

About the only thing we know won't happen, is voluntary price restraint.