Argentina's Mileise: Retailers report wholesale price hikes averaging 40%, ahead of shock devaluation
Retailers in Argentina have reported wholesale price hikes averaging 40% since the November 19th election of far-right candidate Javier Milei to the presidency.
The jump in wholesale prices comes amid fears that the incoming Milei administration - which takes office this Sunday - would enact a shock devaluation of the already battered peso, which has already lost over half its value so far this year.
Among the sharpest reported increases, have been those for dairy and personal hygiene (50%), packaged bread (65%), and vegetable oil (200%).
Cities across the country have meanwhile announced imminent bus fare hikes averaging around 30% (with some, such as as Mar del Plata and Posadas, more than doubling fares), and health insurance premiums - which Milei has announced will be deregulated - are expected to jump 35% in January.
Consumer prices - which in Argentina are now reported weekly - rose 3.1% in the week after the runoff election, and 10.8% over the past month. But December inflation is expected to approach 20%.
Milei had repeatedly stated during his campaign that he would have the peso devalued "to the blue level" - a reference to the black ("blue" ) currency market currently representing a 160% hike in the official dollar/peso exchange rate (from 379, to 955 pesos).
Incoming Interior Minister Guillermo Francos said recently that an official rate of "between 600 and 650 pesos" would be "reasonable" - which still equals a 58 to 71% devaluation at current rates.
The consensus among economists is that this sharp devaluation will be largely transferred to prices.
"The impact on inflation will be quite large. It's only worth remembering how after the post-(August 13th) primary devaluation of 22%, the (monthly) CPI jumped from 6 or 7% to more than 12% for two consecutive months," economist Federico Zirulnik with the center-left CESO think tank noted.
"Imagine what can happen with a devaluation of almost 80%."
At: https://www-eldestapeweb-com.translate.goog/economia/inflacion/dolar-a-650-pesos-anticipan-un-traslado-a-precios-y-una-retraccion-del-consumo-2023126052?_x_tr_sl=es&_x_tr_tl=en&_x_tr_hl=en&_x_tr_pto=wapp
Sticker shock: A consumer inspects hastily marked new prices in a Buenos Aires grocery store four days after far-right candidate Javier Milei's victory in November 19th runoff elections.
Wholesalers have issued price hikes averaging 40% since then, amid what's expected to be a devaluation of anywhere from 58 to 160% from the incoming Milei administration.
Consumer prices in Argentina have already risen nearly 150% over the past twelve months.
