Inflation: July Will Be A Shock To The Government And They Expect Wages To Tie

Inflation: July Will Be A Shock To The Government And They Expect Wages To Tie

Inflation: July Will Be A Shock To The Government And They Expect Wages To Tie

Sergio Massa finished his first day at the head of the Palacio de Hacienda and worked with his team in what will be the first weeks of his management in a “complex” scenario. In the Government they already know that the inflation figure for July will be a “shock” for the Government, while that of August will also be very high. As for salaries, the official bet is, at least, that they tie in the race with the IPC.

Sources from the Ministry of Economy commented to BAE Negocios that Massa met with economists this Thursday morning , prior to the meeting he had with his secretaries , although they preferred not to give details in this regard. He asked his subordinates to make a list of “5 urgencies and 10 priorities” for the next few days to start outlining the plan for the first few weeks.

 

Later, there was a meeting with President Alberto Fernández in which they discussed a “complex” outlook for the coming months in fiscal, monetary, reserve and inflation matters. Regarding this point, in the Government they no longer talk about the possibility that wages beat inflation . In the corridors of the Palacio de Hacienda, it was commented that the objective is “at least they tie” .

As this medium was able to know, the July data from the REM will show an expectation of 7.5% average and in August it will not be much lower. Thus, they would exceed the figure for March , which was 6.7%, due to the sharp rise in the dollar and the remarks that occurred as of June.

The bet of the Ministry of Economy is that there will be a gradual decline starting in September , when they expect less devaluation pressure due to lower energy imports and an income of foreign currency that they expect from agriculture, but also from international credits.

On the other hand, the current Care Prices scheme will be renegotiated with “voluntary” agreements and the idea is to increase control. In any case, private estimates are very harsh and in many cases already exceed 90% by 2022, well above the 62% ceiling projected in the Budget left by Martín Guzmán.

Regarding income, the Government expects to apply a series of supplements as a palliative for the current difficult situation . For example, this Thursday the Minimum, Vital and Mobile Salary Council was convened for next August 18. In this regard, Massa had advanced that “salaries between $50,000 and $150,000 are the ones that are most affected, there we are going to focus the study of the modification of family allowances.”

Likewise, a reinforcement for retirees will be announced on Wednesday , which will be applied from September, aimed at “overcoming the damage of inflation.” The minister also anticipated that “business entities and workers will be convened on Thursday of next week in order to ensure a mechanism that allows workers in the private sector to recover income , which includes the improvement of family allowances.”

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