Argentina freezes prices on staples from rice to milk in inflation 'battle'
(Adds Macri comments)
By Maximilian Heath
BUENOS AIRES, April 17 (Reuters) - Argentina will freeze
prices on dozens of staple products, including rice, sugar and
milk, in a bid to rein in rampant inflation and support hard-hit
consumers ahead of national elections at the end of the year.
The government said on Wednesday it had agreed with
retailers to fix prices on 60 "essential" products for at least
six months, and that it would hold public service prices steady
for the rest of the year.
The president, in comments circulated by his office, said
that running a country required "battles every day" and that
"the battle against inflation is the most important."
The measures come after inflation sped up to 4.7 percent in
March and was running at a 12-month rate of almost 55 percent, a
trend that has sapped people's spending power and hammered
President Mauricio Macri in the polls.
Staples that will have their prices frozen include cooking
oils, flour, yogurts, jams, biscuits and Yerba mate tea, a
ubiquitous beverage in Argentina sipped through a metal straw.
There were also separate measures to help keep domestic meat
"In this period where we have a temporary acceleration in
inflation, it's very important to bring relief to Argentine
families," Argentine Treasury Minister Nicolas Dujovne told
reporters on Wednesday, adding that inflation was at a "peak."
Macri will seek re-election later this year, but is facing
flagging popular support as he seeks to restore growth in the
country, rein in inflation that rose 50 percent last year,
prevent a run on the peso currency and halt a rise in poverty.
Thomaz Favaro, regional director for consultancy Control
Risks, said the price freezes reflect the government's concern
as it looked to win back wary voters. But he said the measures
were generally an inefficient way to temper inflation.
"We're likely to see a much more populist face of the Macri
administration, with short-sighted measures to build political
capital ahead of the elections," he said.
The country's major cities have regularly seen protests
against rising prices and hikes to public utilities, which have
climbed sharply as the government has cut back on once-generous
subsidies as part of a deficit reduction program.
The latest measures by the government also come on the heels
of new central bank measures announced on Tuesday, aimed at
tempering inflation and supporting the peso.
The currency strengthened 2.42 percent on
Wednesday to 41.40 per U.S. dollar, traders told Reuters.
(Reporting by Maximilian Heath and Nicolas Misculin; writing by
Cassandra Garrison and Adam Jourdan; Editing by Bernadette Baum
and Bill Berkrot)
First Published: 2019-04-17 00:14:32
Updated 2019-04-17 19:36:09
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