Argentina fails to tame stubborn inflation
Argentina significantly overshot its inflation target in 2017 as prices rose around 25% from the previous year, raising questions about the country’s ability to tame a problem that has plagued it off and on for decades.
Consumer prices surged 3.1% in December from the previous month, pushing the annual inflation rate to 24.8%, far beyond the central bank’s target of 17%. The City of Buenos Aires measured inflation at 26.1% - in line with private estimates.
Last month, officials relaxed the inflation targets for the next two years, acknowledging they have been unable to combine stronger economic growth of about 3% last year with a significant decline in the inflation rate.
Consumer prices have meanwhile risen by 85% since Macri took office, while average wages have done so by around 70%.
The problem has been compounded by a decision to raise public utility rates by up to 1700% since March 2016, which the right-wing Mauricio Macri administration defends as a way to cut $4 billion of dollars in subsidies.
The nation's budget deficit, however, has more than doubled in peso terms since Macri took office in late 2015 as tax cuts for agroexporters, mining, and other sectors erode revenues.
Record interest payments - some $15 billion in 2017 alone - have also pushed budget deficits upward mainly due to the issuance of LEBAC 30-day bills, which until December yielded around 13% in dollar terms.
A record, $27 billion LEBAC maturity on December 18 was largely redeemed (63%) rather than rolled over. The resulting purchase of dollars, whose trade was deregulated by the Macri administration, devalued the peso by 10% in a week, from 17.50 to 19.50.
Consumer prices, accordingly, are expected to rise another 4% in January alone.
At: https://www.wsj.com/articles/argentina-fails-to-tame-stubborn-inflation-1515708458
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the same ones who worked night and day to overthrow Cristina Fernández de Kirchner, Macri is sending the country down the drain in no time at all. If this pace continues, they won't have a living country to devour sooner than his term will end, and they can pass on the wrecked economy to the next progressive to clean up again.
While the next progressive is trying to put the country back on track, once again, they'll start howling about how that President is handing out the taxpayers' money to the poor, the downtrodden, the helpless, and get the hate machine going again so they can take the next one down, too.
In time, this pattern is finally going to collapse. It needs to happen to Macri.
The numbers are appalling.
I never expected to see WSJ point out that Macri is a "right winger"! One wonders what on earth that could mean. A Rupert Murdoch publication calling the kettle "right wing"?
Mauricio Macri, saving up for a complete silver flute.
He's part way there, already!