Argentina reaches elections with monthly inflation of 5.9% in September | Argentina

Eleven days after the general election in Argentina, Mauricio Macri received another bad news on Wednesday: inflation in September was 5.9% monthly in September and year-on-year at 53.5%. The rise in prices, the largest recorded so far this year, is linked to the strong devaluation suffered by the peso after the primary elections on August 11, when the dollar had risen from 46 pesos to 59 pesos.

Contrary to the trend of previous months, the rise in food prices released by the National Institute of Statistics and Census (Indec) was below average, or 5.7% per month. The moderation of the increase is a consequence of the removal of VAT on basic food basket products, such as milk, bread, rice and oil, among others.

This government measure is in addition to other measures approved by the government of Mauricio Macri over the last 18 months to increase the money in the pocket of the Argentine, punished by the fall in wages, the destruction of jobs and the increase expenses lightly. , water, gas and transport. The executive approved an extraordinary tax exemption for workers in the formal sector and the granting of a bonus of 5,000 pesos ($ 85) to state employees, among other measures.

The budget for 2020, with which the next government will be managed, considers that the current inflationary rebound is temporary and estimates that the rise in prices will reach about 34% next year. According to official calculations, the gross domestic product will increase by about 1% after two consecutive years of decline.

Both projections are optimistic compared to those of the International Monetary Fund (IMF), which expects Argentina to close the year 2020 with inflation close to 40% and a drop in GDP of 1.1%. In its report on the World Economic Outlook (WEO) presented Tuesday in Washington, the IMF said that Argentina was part of the group of emerging countries that "partly contributes to the decline in projected growth for 2019 ". "Argentina, Iran, Turkey, Venezuela and the small conflict-affected countries, such as Libya and Yemen, have experienced or continue to experience very serious macroeconomic difficulties," he added. text.

Last year, the international organization provided a $ 57,000 million loan to Argentina, the largest in its history, but suspended the $ 4,500 million payment due in September due to uncertain timing that crosses the country. From the victory of more than 15 points of Alberto Fernández to Macri during the primary of September 11, the Peronist is the favorite of the elections of October 27, which could be defined in the first round if the winner gets more than 45% of the votes or 40% and 10 points of difference on the second.

The IMF's forecasts may change again once the outcome of the elections is known and the new government defines the economic course.

Last Sunday, during the presidential debate, Macri attacked Fernández for corruption in Kirchnernism and Fernández made the blow by recalling the promise he made to end poverty and inflation. Both have increased during their management, as well as unemployment and external debt, which accounts for almost 100% of gross domestic product.

Macri, Fernández and the four other candidates for the Argentine presidency will face again this Sunday in front of the cameras. On Monday, they will launch the last week of the campaign. The president bets to surprise and manages to force a second round, but each new economic data seems to distance his reelection.