Argentina - Beef prices triple in six weeks

Until this week the Cristina  Fernández de Kirchner administration has done the impossible in denying the reality of inflation, even if it is the talking-point in most conversations and even if the collective wage bargaining season is right on top of us, but the self-deception has become unsustainable with various ultra-loyalists now lining up to recognize the obvious. Perhaps the trigger was Economy Minister Amado Boudou’s provocative statement: “There is no inflation, only a shift in relative prices in some products” — followed up the next day by Cabinet Chief Aníbal Fernández accusing critics of failing to understand the subtle distinction between the cost of living and the consumer price index. CGT Secretary-General Hugo Moyano ridiculed Boudou’s statement by saying that to deny inflation was like denying rainfall and talking of a passing cloud (almost as acid as Margarita Stolbizer likening inflation denial to “describing the Haiti earthquake as minor movements of soil particles or slight shifts of geological strata”) — even arguably the country’s most pro-Kirchner governor, Tucumán’s José Alperovich, not only admitted the reality of inflation but called it the “worst tax.”
Even if CFK could not resist some jabs against ranchers in her almost daily harangue on Tuesday, there is at last some recognition of the law of supply and demand in government analysis, instead of the previous insistence that the most desired items should have the lowest prices for that reason — it is indeed curious to see Domestic Trade Secretary Guillermo Moreno trying to calm down an impatient CFK by explaining that surging beef prices are a seasonal and temporary phase caused by rainfall and ranchers restocking herds depleted by five years of repressed prices. Inflation is almost inevitable — not just because of recovering demand amid continuing supply bottlenecks but because of the cumulative effect of the previous boom years in which the government takes so much pride. When inflation doubles or trebles the levels in the rest of the region, neither denial nor blind price curbs suffice — the thrust of government intervention is thus supposedly to boost supply in key sectors rather than to control prices artificially. But two crucial elements are still missing — due recognition of monetary policy as a factor in inflation and an appreciation of the vital role of investor confidence in expanding supply (something which Uruguayan president-elect José Mujica sees very clearly).

Source: buenosairesherald

Back to News Headlines