After it was announced that inflation in July was 4%, according to INDEC data, Lucas Romero explained that although the index is low, the services sector such as “housing, water or electricity” has accumulated an inflation of “161%” in the year. He warned that Javier Milei is failing to “persuade the Argentine public that he is solving the problems. If people do not see their income recovering, they will not view the government with sympathy.”
“I think that is the risk that Milei faces. The data indicates a slowdown in inflation, and that could be an indicator that the economic program is actually achieving success in terms of disinflation. The problem is that the Government has to manage people’s expectations: people have to understand that the Government is managing to resolve the economic problems.”he indicated.
He added: “The slowdown in inflation is understood in a macro context of the economy, but perhaps it is not perceived as clearly by people because there are some elements of the daily economy that continue to show worrying numbers, such as consumption. The Argentine Confederation of Medium-sized Enterprises (CAME) recently reported that food and drink consumption registered a 21% drop in the first half of the year. The CPI data shows 4%, and at the same time, an accumulated inflation of 87%. If people do not see their income recovering, they will not view the Government with sympathy. Ultimately, what people want is not being achieved: for their salaries to recover.”
Fall of the Government’s image
The consultant also stated: “In our August survey we are seeing that the image of the Government continues to decline. For the third consecutive month we have seen a deterioration in the composition of the President’s image.”
“One might assume that in this challenge of having to put the economy in order before politics becomes disordered, we seem to be in a moment of tension. The reactivation of the economy is not being as vigorous as expected and the President’s image is beginning to show signs of deterioration,” he stressed.
“We will live with this tension until the Government effectively convinces people that economic solutions are on the table, that the economic order achieved is sustainable and long-term, and that people feel not only that inflation has dropped, but that their wages have recovered, their ability to consume has recovered and, ultimately, their quality of life has improved,” accurate.
The curious thing about Milei’s statement yesterday, that “everyone sees the miracle, except the Argentines,” and that it already sounds like a reproach (it cannot be that they do not see it), is that his function as president is to persuade, which means: either the facts are lacking to persuade, or his words fail.
— Lucas Romero (@LucaRomero) August 15, 2024
Romero also explained: “Milei gave a speech at the Council of the Americas and on two occasions questioned that outsiders see her, but Argentines do not. Evidently, he is seeing that he is not managing to persuade the Argentine public that he is solving the problems. Perhaps that is why he decided to get directly involved, like when he asked the former president today if he intended to give Dylan to him.”
And he concluded: “Having said all this, I think that even if we maintain the hypothesis of Fabiola Gate, it is difficult not to think that Milei will do as the economy does. As always, or perhaps as never, the economic dynamic is and will be a determining factor in the political dynamic. I think that Argentines are waiting for Milei to resolve the economic problems, beyond the things that are known about an actor who is a toxic liability of Peronism. In any case, it will be a problem for Peronism, but Alberto’s scandal does not seem to be a relief for Milei.”
