In the same week that the Government announced a reduction in the tax burden for some sectors, August inflation was known, which was 12.4% and the highest since 1991. In other news, Javier’s international relations reference Milei caused controversy with an electoral promise about the Malvinas, and law enforcement forces raided the main Nazi bookstore in Argentina.
Since February 1991, a monthly inflation record in Argentina had not been as high as that of August. The item that increased the most was also the most sensitive for lower-income consumers: food and non-alcoholic beverages.
In this inflationary context, the Government presented fiscal relief measures for different sectors, which were not exempt from criticism.
The opposition of Together for Change, meanwhile, celebrated the victory of its candidate in the elections for the governorship of the province of Santa Fe.
Meanwhile, Javier Milei’s international policy representative, Diana Mondino, caused controversy by saying that the rights of the inhabitants of the Malvinas/Falklands would be respected in a possible government of the presidential candidate.
In another order, the police raided one of the largest distributors of Nazi material in Argentina.
Argentina had the highest monthly inflation in 32 years
Inflation in August 2023 was 12.4%, the National Institute of Statistics and Censuses (INDEC) reported on Wednesday, the highest since February 1991. It almost doubled that of July, which had been 6.3%. . Inflation between August 2022 and the same month of 2023 was 124.4% and the accumulated rate so far this year is 80.2%.
The food and non-alcoholic beverages category, the one that has the most impact on the lower-income sectors, is the one that rose the most, 15.6% monthly. During the month there was a significant jump in the price of meat and vegetables and bread. It was followed by another sensitive item, health, which increased by 15.3%, mainly due to increases in medications.
Possibly part of the high inflation in August can be explained by the devaluation on the 14th of that month, one day after the presidential primaries, in which the Government increased the value of the official dollar by 22%. That led to a general increase in prices in a single day, in some cases around 20%.
The Government’s attempts to contain increases through price agreements do not appear to have been sufficient and there are forecasts that September inflation could remain in double digits. And although the Ministry of Economy believes that there will be a “carryover” effect of the devaluation of August 14, the Secretariat of Economic Policy, which depends on that portfolio, reported that according to its estimates, in the first week of September, inflation approached values prior to that date. It also reported that it will begin publishing its weekly inflation estimates every Friday.
In the first week of September (between September 4 and 10) it would have reached a value of 2.1%.
The graph shows us the weekly evolution of inflation. pic.twitter.com/UlGLn0FudT— Secretariat of Economic Policy (@Politicaecon_ar) September 15, 2023
Tax relief measures surrounded by criticism
The Minister of Economy and official candidate Sergio Massa announced this week a series of measures to return some purchasing power to the income of Argentines in the context of high inflation in which the country finds itself.
They range from tax relief to access to cheap credit. On the one hand, there is the refund of a certain part of the value added tax (VAT, between 10.5% and 21%) on consumption of basic basket products made with debit cards. This benefit is for low to middle income sectors of the population.
On the other hand, the floor from which workers begin to pay income tax was modified by decree, so that only those who earn more than 1,770,000 pesos (a little less than 2,500 dollars at the parallel exchange rate) will pay. the equivalent of 15 times the minimum wage. This measure, which will be in effect for the second half of 2023 – that is, it will be retroactive to July – was specifically questioned because it is seen by some sectors as regressive, since it grants a tax benefit to sectors with better incomes.
The announcements were also questioned because they cut the State’s collection capacity in a context in which the Government finds it difficult to control the fiscal deficit. In that sense, Minister Massa said that the modification in the income tax was compensated by higher income from taxes on imports and by improvements in collection due to greater consumption.
Another criticism of the measures is that they may end up having an inflationary effect, among other things because they could have to be financed with greater issuance of pesos.
The Government sent a bill to Congress to make a modification to the income tax in line with what was decided by decree. This puts the opposition forces of Together for Change and La Libertad Avanza (by Javier Milei) in a difficult position, who promote lower taxes in their platforms, but who in the electoral context could pretend not to support the official candidate.
Opposition triumph in an important provincial election
The province of Santa Fe, in the center of the country, elected a governor last weekend, in addition to voting for legislative positions and mayors, among them that of the city of Rosario, the third with the most inhabitants in Argentina, crossed for some years due to violence associated with drug trafficking.
Maximiliano Pullaro, from the United to Change Santa Fe front, which at the national level is linked to the opposition of Together for Change, won the Governorship with 58.4% of the votes and with an advantage of more than 27 percentage points over the official Marcelo Lewandowski.
In Rosario, the current mayor, Pablo Javkin, also from Unidos para Cambiar Santa Fe, was re-elected.
The province of Santa Fe is the third most populated district in the country and part of the heart of national agricultural production; According to the Rosario Stock Exchange, in 2021 that province represented 10.3% of the Argentine economy.
Controversy over electoral promises about the Malvinas
In an interview published on Sunday in the British newspaper ‘The Telegraph’, the candidate for deputy of La Libertad Avanza and a reference in international politics in that space, said that the rights of the islanders, of the inhabitants of the Malvinas/Falklands, will be respected in an eventual Government of Javier Milei.
The statements provoked an immediate reaction in Argentina, because that is precisely one of the central arguments of the United Kingdom for not accepting the Argentine demand for sovereignty over the islands.
The Secretary of the Malvinas, Antarctica and South Atlantic in the Argentine Foreign Ministry, Guillermo Carmona, wrote that Milei “wants to lead us towards a policy of handing over the Malvinas.”
When in statements to Continental radio Milei said that “the position of those who live there cannot be ignored” and suggested making an agreement with the United Kingdom similar to that of China with Hong Kong, Carmona said that “the problem is not the negotiation model apply but the lack of will of the United Kingdom to sit down at the negotiating table. And always the pretext is the same: the refusal of the islanders.
They raided the largest Nazi bookstore in Argentina
Security forces seized Nazi propaganda material this Wednesday, some 200 books with images of swastikas and iron crosses, and other elements, according to the Federal Police, material that is prohibited from being exhibited. They raided two homes in the province of Buenos Aires and arrested a 45-year-old man. The man had one of the largest distributors of Nazi material in the country and sold through the Internet.
The raids and arrest took place after two years of investigations, in which telephone wiretaps were carried out and a purchase was simulated. The investigation began due to a complaint from the Delegation of Argentine Israeli Associations (DAIA).
Source: France 24
