BUENOS AIRES Dec 20 The Argentine government on
Friday announced price freezes on up to 200 goods to offset an
uptick in already steep inflation, in a move that for the first
time affects suppliers, in addition to supermarkets.
Private economists say Argentine inflation is running at
more than 25 percent annually. Official figures, widely disputed
as manipulated, put inflation in the 12 months through November
at 10.5 percent.
The price freezes affect products that represent roughly
two-thirds of typical low-income household purchases, the
Unlike this year's two previous price freezes, this new
measure affects suppliers as well as supermarkets. The year-long
freeze will take effect on Jan. 1, and prices may be revised
during the course of 2014.
"It's basically a voluntary price agreement between the
national government and the sector's main actors," Economy
Minister Axel Kicillof said. "It's a voluntary agreement on
prices because we know that controls imposed on the private
sector and price freezes imposed on the private sectors aren't
Most of the goods affected by previous price-freezes were
not sold in supermarkets.
The main supermarkets operating in Argentina, Latin
America's No. 3 economy, include units of Chile's Cencosud
, France's Carrefour and the United States'
Wal-Mart Stores Inc.
Allies of President Cristina Fernandez took a beating in
October's mid-term elections, in part because of the soaring
Since then, officials have started to publicly acknowledge
steep price increases.
Argentine inflation, Latin America's second-highest after
Venezuela's, has picked up in recent months due to a weaker peso
The central bank has allowed the currency to lose roughly 18
percent since the beginning of June. The bank had previously
artificially kept it strong to avoid stronger inflation
But the policy in turn hurt the grains powerhouse's key
exports, putting Argentina's trade surplus at risk. Maintaining
a trade surplus is critical because Argentina has been shut out
of international capital markets since its massive debt default
more than a decade ago.
The 2002 default pushed millions of middle class Argentines
Generous welfare spending under Fernandez has improved the
lives of many of Argentina's poor, though the policies have also
Argentina's 4.3 percent rate of poverty was by far the
lowest among 11 Latin American countries surveyed in both 2011
and 2012, a United Nations body said earlier this month.