Expect more shortages, black markets and inflation:
Argentina Launches New Price-Control Accord
New Program Sets Stage For Annual Wage Talks
The one-year program sets prices on 194 supermarket items including staples like milk, meat and pasta as well as discretionary items such as beer and ice cream.
I wonder if dulce de leche, coffee and mate are included.
The goverment doesn’t think of it as imposing uncompetitive prices; instead they call it “reversing unjustified prices.”
No matter what you call it, bad economic policy has consequences:
President Cristina Kirchner faces the same economic problems in the New Year as she did in 2013: low growth, rising inflation and foreign currency shortages.
The second highest rate of inflation in the Americas has also forced the Kirchner administration to ration the hard currency people and businesses can legally buy to prevent a run on the central bank’s foreign currency by inflation weary residents.
Even so, debt payments, fuel imports and capital flight gobbled up $12.7 billion in hard currency last year. Reserves have stabilized in recent weeks at a seven-year low of about $30.6 billion.
It’ll continue and worsen, for as long as the high government spending financed in part by money printing continues. Argentina will remain in the Troubled Currencies list for the foreseeable future.