The overall level of Internal Wholesale Price Index (IPIM) recorded an increase of 6.5% in January compared to December and accumulates a 100 % year-on-year increase, reported this Thursday the National Institute of Statistics and Censuses (Indec). In turn, the cost of construction marked a rise of 6.2% per month and adds 97.9% year-on-year.
Thus, both increases in wholesale prices were above the increase in consumer (retail) priceswhich accelerated to 6% in January, which portends greater difficulties for a slowdown in the coming months.
— INDEC Argentina (@INDECArgentina) February 16, 2023
According to INDEC, the 6.5% variation in wholesale prices is a consequence of the 6.3% rise in the “national products” and 8.5% in the “Imported products”.
For its part, the increase in the construction index arises as a consequence of a rise of 5.6% in the chapter “Materials”, from 6.6% in the chapter “Manpower of labour” and 6.8% in the chapter “General expenses”.
The inflation data with which the year begins begin to complicate the prospects (economic, political and electoral) of the Economy Minister Sergio Massawhich had promised that in April the inflation number “would start with a 3 ahead”, to reach the projected 60% annualwhich appears to be increasingly difficult to comply with and rather a number to limit salary increases.
Now, the vice minister of economy, Gabriel Rubinsteinreworks the proposal to continue validating that goal: “we hope that, towards the end of the year, the CPI will be close to 3%, with inflation for the year around 60%,” he tweeted.
The truth is that the Government is unable to control inflation, proposing some “patches” through price agreements, but on the other hand encouraging inflation with the rise in tariffs, fuels and the application of the adjustment plan agreed with the IMFwhich also has recessive consequences on activity.
Policies of a different kind are neededas a true control of prices by workers and consumers, the opening of accounting records and bank movements of companies to end the secrecy of their profits, the nationalization of public services and banks under the control of the workers and the rejection of the IMF and the payment of the fraudulent foreign debt.
These steps go in depth with some of the structural problems that cause inflation and they necessarily affect the interests of the economic groups that continue to amass profits, mark up prices, speculate and transfer costs, while a majority of the working class loses purchasing power.