The inflation released last Wednesday (13) by the National Statistics Institute of Argentina represented the highest rates in 32 years: 12.4% in August and 124.4% in the last 12 months.
Hours later, the Minister of Economy and presidential candidate, Sergio Massa, announced that around 18 million people will benefit from the refund of taxes on basic food products.
The week in the country started with another exemption. Workers who earn up to R$25,000 (1.7 million Argentine pesos) per month will not pay income tax. In recent days, the government announced increases and bonuses for retirees, public and private sector workers and domestic workers, in addition to facilitating access to credit.
The measures are a response to the impact of ultra-liberal Javier Milei’s victory in the primary elections in August.
The day after the election, the government devalued the Argentine peso by 22%, the Central Bank increased the basic interest rate from 97% to 118% per year, the parallel market dollar soared and prices went through the roof, and the Argentine felt in his pocket.
Despite trying to provide relief for millions of Argentines in the face of the crisis, analysts agree that the government’s measures should cause more inflation in the coming months and try to ensure that Sergio Massa reaches the second round of elections against Milei.
For political scientist Pablo Touzon, “the only thing that [o governo] What you can do are these short-term demagogic measures to see if they can have a more or less rapid impact on people’s pockets. I don’t believe this has an electoral impact (…) I think it’s more of a fetish of the ruling political class than a reality that has an electoral result later.”
According to economist Martín Kalos, the measures could help the minister’s candidacy, but could leave an even more complex fiscal scenario for the next administration.
“The government will leave a relatively high deficit, probably around 3 points of GDP, when all presidential candidates, including Massa, promise to reach fiscal balance next year. This 3 point reduction in GDP from one year to the next can be quite complicated, especially in terms of social impact”, explained Kalos.
See also: Inflation in Argentina has the highest monthly increase in 32 years
Source: CNN Brasil
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