After several years with “floored” prices, the liberation of regulated prices in the economy proposed by the new management of Javier Milei is
reconfiguring the relative price structure of goods and services.
That is to say, the dismantling of “repressed” inflation, especially in the case of public service rates, but also fuel, prepaid and others,
is shortening the gap
with the increases that, in recent years, fell on other goods such as
food or clothing and footwear.
One way to see the evolution of the trend is to compare the behavior of regulated prices with those that make up “core” inflation, that is, that which
does not take into account seasonal variations.
Taking the period between November 2023 and February of this year, the latest data available from INDEC, it can be seen that
core inflation accumulates a 73.1%
increase, while
regulated prices
(electricity, gas, communications, transportation, prepaid medicine, fuels and others) did
so 85%.
If the comparison is made in one year, to rule out seasonal effects and see the period in which subsidies were still strong, the effect is the opposite: "core" inflation, with an increase of 292%, remained above the prices “stepped on” with the regulations maintained by the previous management, which rose 260.6%.
Claudio Caprarulo, economist at Analytica explains: “before, during Alberto Fernández's administration, core inflation evolved at a certain rate and core inflation went below.
This meant that there was a very large gap that later became smaller under the new management of Javier Milei.
The ranking of the items with the greatest increases in these last four months is led by
Basic Goods and Services Transportation, Health, Communications and Home Equipment and Maintenance.
On the other hand, during Alberto Fernandez's administration, that same ranking was made up of clothing and footwear, Restaurants and Hotels;
Food and non-alcoholic beverages (which increased 303% in the last year alone
) and Recreation and Culture.
According to Caprarulo, this shows that “they are moving to another relative pricing scheme.
What we are beginning to see is that the Government wants to move towards a different configuration, seeking, among other things,
to recover the loss that some prices had that were regulated or frozen during the previous administration.
A very clear example in this sense are the systematic and gradual increases in fuel prices that have taken place since December 10.
And that, according to the oil companies, still has a section to "recompose."
Eco Go economist Rocio Bisang reinforces the concept: “when we talk about recomposing relative prices, we talk about
all prices once again having the same relationship that they had with each other
, in the period we take as a base,” she explains.
"The rates increased in the last year less than food increased, so the relationship between the two changed compared to 2023. When we talk about correction or recomposition, we mean that rates should now increase above food, so that return to having that relationship that they had at the beginning,” he explained.
For this reason, according to Caprarulo, “
the problem is still not resolved and is very complex
,” he warns.
Because, we come from a very important gap.
"If the period between December 2019 and February 2024 is evaluated, it can be seen that regulated prices increased by 1,092% and seasonal prices
almost doubled:
1,935%," exemplifies the analyst.
That is to say, the gap between regulated and seasonal prices or the correction of relative prices
will take time.