Argentina update

uh-oh...

when i was in BsAs in march, there was a lot of talk of rising prices... president kirchner traded on his high approval ratings by publicly berating shell oil for raising the price of gasoline... he also got the poultry, meat and dairy producers to agree to a price-rollback, citing the need for families to be able to afford to eat, which they then promptly ignored...

now it looks like things aren't getting much better... i've got my fingers crossed for 'em... there are some really good people there who deserve a break...

(from the buenos aires herald, april 7)

DOUBLE-DIGIT DANGER

March inflation was a worst case scenario in many ways — the highest forecast (1.5 percent, as bad as January) with basic food prices (where the main effort at price restraints had been made) rising twice as fast in an election year. The latter factor compounds the problem, not only because election year spending makes it harder to fight inflation but also because the poor suffer most — thus double-digit inflation (which now seems inevitable with first-quarter inflation reaching four percent, half the 2005 budget forecast for the entire year) drives some two million people below the poverty line. The government’s price pacts have proved useless with beef, chicken and dairy produce all going up by almost 10 percent despite agreed cuts.

[...]

One thing is for sure — the "Argentine miracle" of simultaneously juggling low prices, modest interest rates and a high dollar is rapidly ending. All three factors are likely to change this year, especially with interest rates also rising globally.
The four percent inflation for this year’s first quarter has already outstripped the 3.7 percent for all 2003 (6.1 percent last year).

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