Inflation accumulated 50.9% in 2021. The data exceeded the 2020 record by 14.8 points and was just 2.9 points below the 2019 peak, which closed at 53.8%.
The Government argued that the rise was fundamentally driven by the international increase in the price of food and highlighted that all the countries of the world saw an acceleration in prices.
In response, this Thursday the new stage of Care Prices was made official. Thus, the strategy of agreements that was insufficient in 2021 is reissued. In total, there were 5 freezes that were not enough to curb inflation during the past year.
Joint at 30%
The year 2021 had begun with Martín Guzmán’s commitment to a “price and salary agreement” in the 30% zone. Several unions showed good will and closed their salary guidelines along these lines.
The Ministers of Economy, Martín Guzmán, and Labor, Claudio Moroni, caused the paritarias to close around 30% in the first part of the year. (Photo: NA)
However, when prices rose and in the middle of the pre-election season, the unions began to pressure to reopen the parity and the Government had no choice but to accept it. Several guilds achieved additional increases.
With different stages, Care Prices worked throughout the year. It included a strict freeze in the last quarter of the year, which doubled the number of affected products.
This program, available in supermarkets, was combined with the launch of “Super Cerca”, which represented the departure from the Maximum Prices that had been set during 2020.
In this case, it was another price agreement, although with somewhat higher values, which was in force until the end of the year in supermarkets and local businesses.
There was also a specific agreement to freeze the price of flour and bread in the last two weeks of the year.
Meat cuts at popular prices
It also worked intermittently for the past year. In general, it included 8 cuts at frozen prices in supermarkets, which were added to another two that were already part of Care Prices.
At certain times of the year, the deals were available on certain days of the week; in others, they were extended to every day. In the days before the Holidays, the offer of cuts at popular prices was also reinforced.
The great drawback of this initiative was that, in most cases, it did not reach the butcher shops, which are the main retail outlets.
Unlike what happened during the administration of Mauricio Macri, when the rates were updated strongly, in 2021 the prices of public services hardly moved.
After several internees between the Minister of Economy and the secretaries of the areas, last year electricity only rose 9% for residential users and gas was only updated 6%.
Maintaining public services with updates lower than the rise in the general price level seeks to prevent increases in other prices from being generated. For 2022, the Government has already announced average increases of 20%.
Like tariffs, exchange rate fluctuations add fuel to inflation. In 2019, it was one of the fundamental factors to explain the spike in prices.
In 2021, on the other hand, the dollar increased less than inflation. From end to end of the year, the wholesale exchange rate advanced 22.1% and the retail exchange rate barely moved 20.7%, that is, below inflation and the blue, which rose 25.3%.
The rate of depreciation of the peso, which had been 3.74% in January, decreased to 1% in November. Although in December it accelerated to 1.8%, from GMA Capital they calculated that the official exchange rate was delayed by 18% in real terms.
In the last part of the year, with Roberto Feletti in charge of the Ministry of Commerce, the Government also agreed with the laboratories to freeze the medicines.
The values were rolled back to November 1 and remained fixed until January 7. Upon expiration, the sector switched to a “reference price” scheme for 85 drugs, which is valid until the end of the month and will be updated monthly.