Tue | Apr 24, 2018

Argentina freezes prices to break inflation spiral

Published:Tuesday | February 5, 2013 | 12:00 AM

Argentina announced a two-month price freeze on supermarket products Monday in an effort to break spiralling inflation.

The price freeze applies to every product in all of the nation's largest supermarkets - a group including Walmart, Carrefour, Coto, Jumbo, Disco, and other large chains. The companies' trade group, representing 70 per cent of the Argentine market, reached the accord with Commerce Secretary Guillermo Moreno, the government's news agency Telam reported.

The commerce ministry wants consumers to keep receipts and complain to a hotline about any price hikes they see before April 1.

Polls show Argentines worry most about inflation, which private economists estimate could reach 30 per cent this year. The government says it is trying to hold the next union wage hikes to 20 per cent, a figure that suggests how little anyone believes the official index that pegs annual inflation at just 10 per cent.

The government announced the price freeze on the first business day after the International Monetary Fund (IMF) formally censured Argentina for putting out inaccurate economic data. The IMF has given Argentina until September to bring its statistics up to international standards, or face expulsion from the world body in November.

President Cristina Fernández and her economy minister, Hernan Lorenzino, responded over the weekend with a flurry of attacks on the IMF, saying the agency's data-gathering efforts had lost credibility in the lead-up to Argentina's historic 2001 debt default. They said IMF advice is leading Europeans astray by favouring big banks over measures that can grow economies out of crisis.

However, Lorenzino also said that the government will begin using a new inflation index starting in fourth-quarter 2013 - just in time for the IMF's decision.

- AP