Argentines run after runaway inflation

Argentines are exhausted from so much running after inflation that is gaining speed. In July, prices increased by 6.3%, up to 113.4% year-on-year. These are very high figures even for a country like Argentina, sick with inflation for decades. And they may even have fallen short. The 18.3% devaluation of the peso decreed by the central bank this Monday unleashed defensive price increases in numerous businesses, while rejection of the government of Alberto Fernández grows, weakened at the polls after the surprise victory of the ultra-liberal libertarian Javier Milei in the Sunday primaries.

A few hours had passed after the devaluation announcement when telephone messages began to arrive reporting increases of 20% starting in September for group classes and subscriptions to services. The sales chain was paralyzed that day “due to a lack of supplier prices” and this Tuesday the new values ​​already included increases.

“Uruguay, which has no resources, is doing well. Paraguay is doing well! What happens to us that we don’t get out of the well?” asks Ismael, owner of a business that sells telephone and music accessories in Buenos Aires. He responds to himself with a message that echoes Milei’s speech on election night: “For the useless and corrupt politicians we have.” This trader explains that the list of imported products is in dollars, so all of them became 20% more expensive between Friday and Monday. But he doesn’t know at what price to sell the ones that are nationally manufactured. His price should remain unchanged at least until next week, but since he doesn’t know if that will be the case, he has opted to raise them by 10%. “Here you never know, that’s why you have to protect yourself. It was the same, this government bankrupted me, I am not going to sell anything, ”he despairs.

In a nearby cafeteria, the owner explains that he has raised prices by 5% and will repeat the strategy starting next Monday. “You cannot go up 20% at once because you scare the client away. With so much inflation, if you don’t have a structure you can’t recover, you can’t transfer everything to prices and you’re falling behind”. He says that other cafes choose to reduce the size of croissants and puddings and he has dispensed with expensive foods, such as nuts, to lower costs. “This country is going to hell. We are left between a madman (Milei) and this corrupt government, ”he adds. He clarifies that in the primaries last Sunday he voted for former Security Minister Patricia Bullrich, but if she did not go to the second round she would vote for Milei before the Economy Minister and Peronist candidate, Sergio Massa.

The Argentine economy has been stagnant for more than a decade. Since 2011 it has had years of growth and others of recession, but in every setback there are people who fall and cannot recover. One in four Argentines is poor; among children the figure rises to one in six. Socioeconomic deterioration is one of the causes that explain the vote for Milei in poor neighborhoods across the country. Many are unaware of the proposals of this presidential candidate who heads the far-right party La Libertad Avanza. Nor do they know those of his main rivals, Bullrich and Massa. This is the case of Ana María Russo, a 41-year-old domestic worker. She met Milei because of her daughter and voted him out because she’s fed up. She wants a change and believes that Bullrich and Massa represent parties that have failed.

Salaries, 20% down

Since the covid-19 pandemic, the economic situation of the lower and lower-middle classes has become even more complicated. Unemployment has dropped to 6.9%, but most of the jobs created in the last two years are precarious. Russo lost the white job he had and accumulates part-time jobs that do not allow him to access health insurance or contribute towards a future retirement. In the first three years of Fernández’s administration, the loss of purchasing power of unregistered workers was 20% and has worsened several points since then. Like Russo, thousands of people travel daily by train on the Urquiza line, one of the seven that connect Buenos Aires with its populated periphery. In the surroundings of its head station, Federico Lacroze, an endless number of small shops and restaurants survive that these days make accounts over and over again without being closed.

There are two and a half months left for the general elections on October 22. Milei won in the primaries, but by a difference that does not guarantee victory in the first round and in an election with a record abstention rate of 31% of the electorate. The main political forces have gone out to look for those voters who stayed at home on Sunday and can change the next electoral result.

Massa seeks by all means to contain prices. He negotiates with food and energy companies for maximum increases of 5% per month and has created a team dedicated solely to this task. But in the final stretch of a discredited government, inflation has become an avalanche impossible to stop. This Tuesday the peso collapsed in the parallel market to a new record of 730 pesos per dollar. The number, highlighted on television, web pages, social networks and applications, reaches a much broader audience than the measures of the finance minister. Part of the population is afraid of what may happen if Milei becomes President. Others don’t care as much as knowing how to get ahead tomorrow.

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