Claudio Lozano questioned the new retiree mobility formula

Claudio Lozano, director of Banco Nación, assured that with the government project on the mobility of retirees, “a semi-annual formula is launched with which retirees lose a quarter of the increase”.

“Since the end of 2017, there are two issues that remain constant in the economic and social management of Argentina: negotiations with the IMF and the systematic and permanent adjustment of pension spending,” said the official. “First, the Cambiemos government changed the update formula to save about 64 billion pesos. And under the macrista formula, assets have lost 23% of their purchasing power“, Outfit.

The government already has its proposal for a new retirement formula

On the other hand, he asserted that “in his first definitions, Minister Martín Guzmán has suspended the macrista formula to avoid the fiscal impact associated with a 42% annual increase in pensions and that was the result that the current formula gave. Its replacement by quarterly discretionary increases, a decision taken as part of the commitment to improve minimum credit, did not maintain this target relative to the price index, produced a decrease in minimum credit by in relation to the evolution of food prices and of course a major deterioration of profits above the minimum “,

Additionally, Lozano questioned the “link” between the decree increases and the one to be implemented in March. “Now, With this splicing scheme and the implementation of a semi-annual formula, retirees lose a quarter of an increase and, in the name of the need to de-index the economy, it is not the price makers, but retirees are invited to send out this signal putting their purchasing power at stake, ”he said.

With the new law, pensions are expected to increase by 12% in March

“Much has been said about the new face of the IMF. But when it comes to the link between negotiations with the organization and its effect of adjusting pension spending, the reality remains the same,” he added.

Finally, he questioned the usefulness of the new mobility formula proposed by the government because does not have a clause establishing a floor for increases equivalent to rising prices. It should be noted that the ruling party recently sent a bill to Congress to re-apply the mobility formula in effect since 2008 and 2017, which adjusts pension assets based on salary level and collection.